Southern Materials is an all$-$equity financed firm with a cost of equity of $15\%.$ Its EBIT is currently $$150,000$ and the analysts of Sothern Materials expect this amount to stay constant forever. The firm considers a change in its capital structure. It plans to borrow $$200,000$ at $8\%$ and to use the proceeds to repurchase shares of stock. The effective tax rate is $30\%.$

Assume that depreciation expense is zero, and that the firm requires no new investments in NWC or capital expenditure. Also, assume that the firm pays out all of its net income as dividends to its shareholders. Assume that Southern Materials exists in an MM world with taxes $($i$.$e$.,$ you may ignore all other imperfections, apart from taxes, that we discussed in class$).$

A$)$ Compute the firm value $($V$)$ and equity value $($S$)$ of Southern Materials after the repurchase.

B$)$Compute the new RS and WACC for Southern Materials.

C$)$Southern Materials has $25,000$ shares outstanding which are currently trading at $$28\mathrm{.}00$ per share. Compute how many shares will be repurchased and the new stock price. Assume efficient capital markets.