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Only answer C for this

Global Pistons (GP) has common stock with a market value of $340 million and debt with a value of $217 million. Investors expect a 16% return on the stock and a 6% return on the debt. Assume perfect capital markets. a. Suppose GP issues $217 million of new stock to buy back the debt. What is the expected return of the stock after this transaction? b. Suppose instead GP issues $63.02 million of new debt to repurchase stock. i. If the risk of the debt does not change, what is the expected return of the stock after this transaction? ii. If the risk of the debt increases, would the expected return of the stock be higher or lower than when debt is issued to repurchase stock in part (i)? Mercer Corp. has 10 million shares outstanding and $111 million worth of debt outstanding. Its current share price is $77. Mercer's equity cost of capital is 8.5%. Mercer has just announced that it will issue $330 million worth of debt. It will use the proceeds from this debt to pay off its existing debt, and use the remaining $219 million to pay an immediate dividend. Assume perfect capital markets. a. Estimate Mercer's share price just after the recapitalization is announced, but before the transaction occurs. b. Estimate Mercer's share price at the conclusion of the transaction. (Hint: Use the market value balance sheet.) c. Suppose Mercer's existing debt was risk-free with a 4.66% expected return, and its new debt is risky with a 4.93%expected return. Estimate Mercer's equity cost of capital after the transaction. a. Estimate Mercer's share price just after the recapitalization is announced, but before the transaction occurs. Mercer's share price just after the recapitalization is announced, but before the transaction occurs is $77. (Round to the nearest dollar.) b. Estimate Mercer's share price at the conclusion of the transaction. (Hint: Use the market value balance sheet.) Mercer's share price at the conclusion of the transaction is $ 55.1. (Round to the nearest cent.) c. Suppose Mercer's existing debt was risk free with a 4.66% expected return, and its new debt is risky with a 4.93% expected return. Estimate Mercer's equity cost of capital after the transaction. Mercer's equity cost of capital after the transaction is%. (Round to two decimal places.)