Astromet is financed entirely by common stock and has a beta of 1.60. The firm pays no taxes. The stock has a price-earn

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Astromet is financed entirely by common stock and has a beta of
1.60. The firm pays no taxes. The stock has a price-earnings
multiple of 15.0 and is priced to offer a 12.0% expected return.
The company decides to repurchase half the common stock and
substitute an equal value of debt. Assume that the debt yields a
risk-free 3.6%. Calculate the following: If EBIT remains constant:
f. What is the percentage increase in earnings per share after the
refinancing? g-1. What is the new price-earnings multiple? g-2. Has
anything happened to the stock price?