A firm currently has $100,000$ shares of common stock outstanding, with a price of $$20.$ The EBIT for the firm will be $$500,000.$ The marginal tax rate for the firm is $40\%.$ All earnings are paid out in the form of dividends. Therefore, there is no growth for the firm and the stock price is determined by DPS$/$ks$.$ The firm must borrow in increments of $$250,000,$ with a maximum debt level of $$1,000,000.$ The increases to the cost of debt and the cost of equity increases with debt is as follows: