$(8$ points$)$ Firm X is solely financed by $$1$ million equity at cost of $10\%.$ X wants to raise $$0\mathrm{.}6$ million debt at cost of $4\%$ and use all of it to buy back outstanding equity.

In a perfect capital market, what will be its new firm value, WACC and cost of levered equity after the buyback? $(4$ points$)$

In a capital market with corporate taxes at $40\%,$ what will be its new firm value, WACC and cost of levered equity after the buyback? $(4$ points$)$

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