Winthrop Stores has a capital structure consisting of $200 million in 8% debt and $300 million in stock outstanding. The firm's cost of equity is 15%. Winthrop decides to sell $50 million in stock and use the proceeds to buy back $50 million in debt. According to the Modigliani and Miller model of capital structure without taxes or bankruptcy costs, what effect should this restructuring have on the firm's cost of equity and weighted average cost of capital? (a) (b) (c) (d) (e) Cost of Equity Decreases Increases Increases Decreases Increases Weighted Average Cost of Capital Decreases Increases Remains constant Remains constant Remains constant