Spam Corporation is financed entirely by common stock and has a beta of .90. The firm is expected to generate a level, perpetual stream of earnings and dividends. The stock has a price-earnings ratio of 7.50 and a cost of equity of 13.33%. The companys stock is selling for $60. 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 5%. The company is exempt from corporate income taxes. Assume MM are correct.

1.Calculate the cost of equity after the refinancing. Note: Enter your answer as a percent rounded to 2 decimal places.

2.Calculate the overall cost of capital (WACC) after the refinancing.

3.Calculate the price-earnings ratio after the refinancing..

4.Calculate the stock price after the refinancing.

5.Calculate the stocks beta after the refinancing.