Williamson Corporation is considering to issue $5 million of perpetual debt to repurchase common stock. The interest rate for the debt is 8%. Williamson is currently an all-equity firm worth 18 million. After the sale of the bonds, Williamson will maintain the new capital structure indefinitely. Williamson currently generates annual EBIT of 4 million. This level of earnings is expected to remain constant in perpetuity. The corporate tat rate is 40%. a. What is the expected return on Williamson's equity before the announcement of the debt issue? (3 marks) b. Use the APV approach to calculate the value of the company. (4 marks) c. What is the required return on Williamson's equity after the restructuring? What is the WACC after the restructuring? (4 marks) d. Use the FTE approach to calculate the value of the company. (4 marks) e. Use the WACC approach to calculate the value of the company. (4 marks) f. Assume the debt is not perpetual, but has a maturity for 5 years. Flotation costs are 10% of net proceeds. Should Williamson still issue the debt? (6 marks)