Spam Corp. is financed entirely by common stock and has a beta of 1.10. The firm is expected to generate a level, perpetual stream of earnings and dividends. The stock has a price-earnings ratio of 7.10 and a cost of equity of 14.08%. The companys stock is selling for $48. Now the firm decides to repurchase half of its shares and substitute an equal value of debt. The debt is risk-free, with an interest rate of 4%. The company is exempt from corporate income taxes. Assume MM are correct.

a. Calculate the cost of equity after the refinancing. (Enter your answer as a percent rounded to 2 decimal places.)

b. Calculate the overall cost of capital (WACC) after the refinancing. (Enter your answer as a percent rounded to 2 decimal places.)

c. Calculate the price-earnings ratio after the refinancing. (Round your answer to 2 decimal places.)

d. Calculate the stock price after the refinancing. (Round your answer to the nearest whole number.)

e. Calculate the stocks beta after the refinancing. (Round your answer to 1 decimal place.)