Wildhorse Grocers Inc. produces annual cash flows of $$205,000,$ which are expected to continue indefinitely. The company is financed entirely with equity capital at an annual cost of $16$ percent. Management is considering borrowing $$470,000$ at an annual interest rate of $7$ percent to repurchase $$470,000$ of the company's outstanding stock. $($You can assume that the debt will be outstanding into the indefinite future.$).$

$($a$)$ What is the total value of Wildhorse' stock before the stock repurchase? $($Round answer to $0$ decimal places, e$.$g$.5,125.)$

Total value of Wildhorse' stock before the stock repurchase $

$($b$)$ Under the assumptions in Modigliani and Miller's Proposition $1,$ what would be the value of the total equity claims on the company's assets after the stock repurchase? $($Round answer to $0$ decimal places, e$.$g$.5,125.)$

Value of the total equity claims on the company's assets after the stock repurchase

$

$($c$)$

What will be the rate of return on common stock required by investors after the repurchase?

$($Round answer to $2$ decimal places, e$.$g$.5\mathrm{.}75\%.)$

Rate of return on common stock required by investors after the repurchase