3. Assume that capital markets are perfect except for the existence of corporate taxes and financial distress costs. Clothing retailer Collage Clothing (CC) is currently an unlevered firm with a share price of C10.00 per share and with 25 million shares outstanding. CC pays a 40% corporate tax rate. CC announces plans to lower its corporate taxes by borrowing 100 million and using the proceeds to repurchase shares. CC's shareholders expect this change in debt to be permanent. - If the price of CC's stock rises to 610.80 per share following the announcement, then the present value of CC's financial distress costs will be closest to 620 million / 60 million / 680 million / 6100 million