The capital of International Electronics, Inc (IEI) is currently an all equity financed. EBIT of IEI is $100,000 a year and is expected to be the same forever. IEI has 10,000 shares outstanding and these shares are currently trading at $70. IEI's management is planning to change the capital structure by issuing $300,000 of debt and the expected cost of debt is 6%. The proceeds from the newly issued debt will be used to buy back part of the current equity. The cost of equity after the reorganization is expected to go up to 11.5%. IEI is in 30%tax bracket. a) What is IEI's current cost of capital? b) What will be the value of the firm after reorganization? c) Assuming that there is symmetrical information, what will be the price of IEI's equity shares after reorganization? d) How many shares can be bought back using the newly issued debt