D'Anconia Copper is an all-equity firm with 60 million shares outstanding, which are currently trading at $20 per share. Last month, d'Anconia announced that it will change its capital structure by issuing $300 million in debt. The $200 million raised by this issue, plus another $200 million in cash that d'Anconia already has, will be used to repurchase existing shares of stock. Assume that capital markets are perfect. 1. At the conclusion of this transaction, what will be the value of a share of Anconia Copper will be closest to:

a. $18.33
b. $20.00
c. $25.00
d. $27.50

2. Suppose you are a shareholder in d'Anconia Copper holding 300 shares, and you disagree with the decision to lever the firm. You can undo the effect of this decision by:

a. borrowing $2,000 and buying 100 shares of stock.
b. selling 100 shares of stock and lending $2,000.
c. borrowing $1,200 and buying 60 shares of stock.
d. selling 60 shares of stock and lending $1,200