remain constant in the future. The company pays out all of its carnings, so earnings per share (EPS) equal dividends per share (DPS), and its tax rate is 25%. The company is considering issuing $3,750,000 of 9.00% bonds and using proceeds to repurchase stock. The risk-free rate is 4.5%, the market risk premium is 5.0%, and the firm's beta is shares could be repurchased at the price that existed prior to the recapitalization, what would the price per share be following the recapitalization? (Hint: P0=EPS/r5 because EPS = DPS.) a) $29.36 b) $40.04 c) $27.36 d) $33.36 e) $25.02