New Age Apps (NAA) is an all-equity firm with 100 million shares outstanding with a stock price of $10 per share. The firm has estimated its cost of equity to be 12%. The firm has a marginal tax rate of 40%. The firm has decided to issue $100 million of debt to retire equity. The debt will have an A rating, a coupon rate of 5%, and will be issued at par value. The new issue will not materially affect the firms risk of financial distress. A. Estimate the change in firm value that will result from the debt issue. Explain the source of the value effects, if any. B. Estimate the change in the firms stock price that will result from the debt issue. Explain the source of the price change, if any. C. How many shares of the firms stock will be retired from the $100 million debt issue? D. Estimate the change in the firms cost of equity that will result from the debt issue. Explain the source of the change in the cost of equity, if any. E. Estimate the firms weighted average cost of capital (WACC) AFTER the debt has been issued and the equity has been retired. Explain the source of the change in the WACC, if any.