Sibco is currently an all equity firm that pays no taxes.  The market
value if the firm's equity is $3 million.  The cost of this unlevered
equity is 15 percent per annum.  Sibco plans to issue 600,000 in debt
and use the proceeds to repurchase stock.  The cost of the debt is 4
percent semi-annually.
After Sibco repurchases the stock, what will the firm's weighted
average cost of capital be?
After the repurchase, what will the cost of the equity be?
Using MM Proposition 2, what will be the weighted average cost of
capital after the repurchase?