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Macbeth Spot Removers is entirely equity financed. Use the following information. Data Number of shares Price per share $ 1,000 10 Market value of

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Macbeth Spot Removers is entirely equity financed. Use the following information. Data Number of shares Price per share $ 1,000 10 Market value of shares Return on assets $ 10,000 Expected operating income $ 1,500 15% Macbeth now decides to issue $5,000 of debt and to use the proceeds to repurchase stock. Suppose that Ms. Macbeth's investment bankers have informed her that, debtholders will demand a return of 12.5%, which is 2.5% above the risk-free interest rate. Assume no taxes. What are r and E after the debt issue? (Enter your answers as a percent rounded to 2 decimal places.) Return on assets % Return on equity % C

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