Brealey Corporation is currently all equity financed and has a value of $$95$ million. Investors currently require a return of $14\mathrm{.}20$ percent on common stock. Brealey pays no taxes. Brealey plans to issue $$35$ million of debt with a return of $4\mathrm{.}1$ percent and use the proceeds to repurchase common stock.

What will be the value of the firm after the debt issue? Please state your answer in millions.

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$95$

Correct response: $95$million

This question has $4$ parts, so you will be clicking verify $4$ times.

Given that the firm will still have a value of $$95$ million, what will be the value of the equity after the debt issue? Please state your answer in millions.

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$60$

Correct response: $60$million

Given that the value of the equity after the debt issue will be $$60,$ what will be the expected return on the stock after the debt issue? Enter your answer as a percentage and round to $2$ decimal places. Do not enter the percentage symbol.

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Number