Question: Global Pistons ( GP ) has common stock with a market value of $ 5 2 0 million and debt with a value of million

Global Pistons (GP) has common stock with a market value of $520 million and debt with a value of million $234. Investors expect a 20% return on the stock and a 11% return on the debt. Assume perfect capital markets.
Suppose GP issues $234 million of new stock to buy back the debt. What is the expected return of the stock after this transaction?
Show your answer in percentage points

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