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Nile.com is planning to repurchase shares of common stock with the proceeds of a $10 million permanent debt issue. The coupon rate and yield of

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Nile.com is planning to repurchase shares of common stock with the proceeds of a $10 million permanent debt issue. The coupon rate and yield of the debt issue is expected to be 10%. Currently, Nile.com is unlevered with 2 million common shares outstanding. Pre-tax operating income (EBIT) is $20 million. The equity currently has an (unlevered) required return of 20%. Assuming the company's tax rate is 40%, there are no personal taxes or financial distress costs, and all cash flows are level perpetuities, answer the following questions: a. Compute the company's total market value before the debt issue and stock repurchase. (Do not round intermediate calculations. Express your answer in whole millions of dollars.) b. Compute the company's share price before the debt issue and stock repurchase. (Do not round intermediate results. Express your answer rounded to whole dollars.) c. d. Compute the company's total market value (debt plus equity) after the debt issue and stock repurchase. (Do not round intermediate results. Express your answer in whole millions of dollars.) Compute the company's share price after the debt issue and stock repurchase. (Do not round intermediate results. Express your answer rounded to whole dollars.) What price is paid for the shares repurchased? (Do not round intermediate results. Express your answer rounded to whole dollars.) f. What is the total value of the firm's equity after the repurchase? (Do not round intermediate results. Express your answer in whole millions of dollars.) O a: 100 b: 50 c 54 d: 27 e: 27 f: 44 O a: 40 b: 25 c: 45 d: 27 e: 27 f: 30 O a: 60 b: 30 c: 64 d: 32 e: 32 f:54 O a: 60 b: 30 c: 64 d: 32 e: 30 f: 54

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