A firm is solely financed by equity with market value of $50,000 and cost of equity of 10%. It wishes to raise another $30,000 via corporate bonds with cost of debt of 5% and use all of it to buy back outstanding equity (no cash holding). Hold investment policies fixed. In a MM world without taxes, 1. the firm value be after debt issuance is $ . Hint: Firm Value = Equity Value + Debt Value Cash 2. the cost of equity after debt is raised is % 3. the WACC after debt is raised is %. A firm is solely financed by equity with market value of $50,000 and cost of equity of 10%. It wishes to raise another $30,000 via corporate bonds with cost of debt of 5% and use all of it to buy back outstanding equity (no cash holding). Hold investment policies fixed. In a MM world with tax rate of 40% 1. The cost of equity after debt is raised is %. 2. The additional value created by debt is $ 3. The WACC after debt is raised is %