Question 3. (8 points) Executive Chalk is financed solely by common stock and has outstanding 25 million shares with a market value of $10 per share. It now announces that it intends to issue $160 million of debt and use the proceeds to buy back common stock. The firm's current cost of equity is 10 percent. The cost of new issued debt is 8 percent and the tax rate is 35%. a. What is the market value of the firm after the change in capital structure? (2 points) b. What is the firm's new debt-to-equity ratio? (2 points) c. After the repurchase, what will be the firm's new cost of equity? New cost of capital? (4P)