-3- QUESTION 4: Highland Techtronics Limited has just earned EBIT of $20,000,000. It expects its EBIT to decline at 2% per year in perpetuity. It is considering switching from an all equity capital snucture by issuing $50,000,000 in perpetual debt at 5%. Equity investors require an 3% return. The personal tax rate on equity income is 21% and on debt income is 34%. The corporate tax rate is 40%. a. Determine the value of the all equity firm. b. Determine the value of the levered firm. c. Assume that the personal tax rates on the equity and the debt incomes are unknown. Ifthe gain from leveraging is $14,85?,143 and the personal tax rate on equity income is 60% as much as the personal tax rate on the debt income, then what are the personal tax rates on equity income and debt income