please solve this problem without using Excel and show all steps.

3. A company currently has 5000000 shares outstanding with price 16. It also has 20 million of debt. It decides on a leveraged recapitalization. It will repurchase 1000000 shares. Currently the expected rate of return on equity is 12% and the risk-free rate is 3%. Assume a perfect capital market. Calculate the expected rate of return on equity after the leveraged buyout