Refi Corporation is planning to repurchase part of its common stock by issuing corporate debt. As a result, the firm’s debt-equity ratio is expected to rise from 30 percent to 50 percent. The firm currently has $4.3 million worth of debt outstanding. The cost of this debt is 9 percent per year. The firm expects to have an EBIT of $1.42 million per year in perpetuity and pays no taxes.