An all$-$equity business has $185$ million shares outstanding selling for $$20$ a share. Management believes that interest rates are

unreasonably low and decides to execute a leveraged recapitalization $($a recap$).$ It will raise $$1$ billion in debt and repurchase $50$ million

shares.

a$.$ What is the market value of the firm prior to the recap? What is the market value of equity?

Note: Enter your answers in billions rounded to $2$ decimal places.

b$.$ Assuming the Irrelevance Proposition holds, what is the market value of the firm after the recap? What is the market value of equity?

Note: Enter your answers in billions rounded to $2$ decimal places.

d$.$ Assume now that the recap increases total firm cash flows, which adds $$270$ million to the value of the firm. Now what is the market

value of the firm? What is the market value of equity?

Note: Enter your answers in billions rounded to $2$ decimal places.