Raymond.com is currently an all-equity firm. The firm's equity is worth 58m. There are 500,000 shares outstanding. The cost of capital on unlevered assets is 12%. Raymond.com pays no taxes. Raymond.com plans to issue $800,000 in risk free debt and use the proceeds to repurchase stock. The risk free rate is 5%. a. What level for annual unlevered cash flows in perpetuity is compatible with a market valuation of 58m? What is the stock price? b. What is the annual interest expense if Raymond.com goes ahead with the debt issue? What amount of cash flows will be left for equity holders? c. What is the firm's value after the share repurchase and the debt issue? d. What is the equity value after the repurchase? After the repurchase, what will the rate of return on equity be? Explain why the rate of return on equity has or has not changed? e. What happens to the stock price? Explain why the stock price has or has not changed