Spam Corp. is financed entirely by common stock and has a beta of 1.15. The firm is expected to generate a level, perpetual stream of earnings and dividends. The stock has a price-earnings ratio of 7.00 and a cost of equity of 14.29%. The companys stock is selling for $46. 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 4.5%. 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.)

Cost of equity %

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

Cost of capital %

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

Price-earnings ratio

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

Stock price $