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%. Assume the companys tax rate is 40%, there are no personal taxes, and all cash flows are level perpetuities. Nile estimates the present value of its future costs of financial distress from its new debt as 20% of the value of the debt. a. Compute the companys total market value before the debt issue and stock repurchase. (Do not round intermediate results. Express your answer in whole millions of dollars.) b. Compute the companys 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.) c. Compute the companys share price after the debt issue and stock repurchase. (Do not round intermediate results. Express your answer rounded to whole dollars.)

a: 60 b: 62 c: 31 a: 100 b: 102 c: 51 a: 60 b: 64 c: 32 a: 50 b: 54 c: 27