A firm that believes in MM with taxes and is thinking about changing its capital structure to include debt. Presently it is only using equity but expects to raise $30 million in new debt. The existing value of the firm Questions: 1) what is the company's existing (pre issuance of debt) cost of equity? 2) what is the new value of the firm it is issues debt? and the value of the corresponding tax shield? 3) What is the new debt/equity ratio? 4) what is the cost of equity of the company with leverage? 5) Can you tell the treasurer what the new cost of capital for the firm would be if it intends to raise $30 million of debt. Today the company has a 30% tax rate and the value of the firm unlevered is $35 million. The new debt would have a coupon of 8%. The firm's EBIT is $6 million.