Vision Inc. has common stock with a market value of $$200$ million and debt with a value of $$300$ million. Investors expect a $15\%$ return on the stock and a $4\%$ return on the debt. Assume perfect capital markets.

a$.$ Suppose Vision issues $$300$ million of new stock to buy back the debt. What is the expected return of the stock after this transaction $(2\mathrm{.}5$ points$)?$

b$.$ Suppose instead Vision issues $$50$ million of new debt to repurchase stock. If the risk of the debt does not change, what is the expected return of the stock after this transaction $(2\mathrm{.}5$ points$)?$