Green Manufacturing, Inc., plans to announce that it will issue$7 million of perpetual debt and use the proceeds to repurchasecommon stock. The bonds will sell at par with a 1 percent annualcoupon rate. Green is currently an all-equity firm worth $11million with 600,000 shares of common stock outstanding. After thesale of the bonds, Green will maintain the new capital structureindefinitely. Green currently generates annual pretax earnings of$4 million. This level of earnings is expected to remain constantin perpetuity. Green is subject to a corporate tax rate of 38percent. (Unless otherwise noted, roundyour answers to 2 decimal places. (e.g., 0.16))

a. The expected return on Green's market value of equity beforethe announcement of the debt issue is percent.

b. Construct Green's market value balance sheet before theannouncement of the debt issue. (Round your answers to the nearestdollar (e.g., 351)) Market Value Balance Sheet Debt $ Assets $Equity $ Total assets $ Total D & E $ The price per share ofthe firm's equity is $

c. Construct Green's market value balance sheet immediatelyafter the announcement of the debt issue. (Round your answers tothe nearest dollar (e.g., 351)) Market Value Balance Sheet Oldassets $ Debt $ PV(tax shield) $ Equity $ Total assets $ Total D& E $

d. Green's stock price per share immediately after therepurchase announcement is $ .

e. Green will repurchase shares as a result of the debt issue.There are remaining shares after the repurchase.

f. Construct the market value balance sheet after therestructuring. (Round your answers to the nearest dollar (e.g.,351)) Market Value Balance Sheet Old assets $ Debt $ PV(tax shield)$ Equity $ Total assets $ Total D & E $

g. The required return on Green's equity after the restructuringis percent.