Problem 1: Hitachi Heavy Equipment Manufacturers is planning to repurchase shares of common stock with the proceeds of a $50 MM debt issue. The interest rate of the debt issue is expected to be 10%. Currently, Hitachi is unlevered with 12 MM common shares outstanding. Pre-tax operating income is $30 MM. The equity has a required return of 20%. Assuming the company's tax rate is 34%, there are no personal taxes, and all cash flows are level perpetuities, answer the following questions: A. Compute the company's earnings per share, stock price, and market value before the debt issue and stock repurchase. B. Compute the company's earnings per share, stock price, market value, and the number of shares repurchased after the debt issue and stock repurchase.