1. A firm has the common stock account as follow:

Common Stock (5,000,000 shares at $3 par) $15,000,000

After 3-for-5 reverse stock split, ____________________.

3. A firm has earnings before interest and taxes (EBIT) of $300,000, interest expense of $50,000, and a tax rate of 40%. The firm has an after-tax cost of debt of 4% and a cost of equity of 16%. The firm's target capital structure is set at a mix of 50% debt and 50% equity. Assuming this as the optimum capital structure, the value of the firm is ________.