An unleveraged firm is considering going into debt. A firm's current value is $5 millions with 1 million shares. The firm is considering issuing $3 million bond, and uses the money to repurchase shares outstanding. Assume corporate tax is 20% and no bankruptcy costs. What is the share price after recapitalization? \begin{tabular}{|r|} \hline$7.2 \\ \hline$6.9 \\ \hline$6.5 \\ \hline$7.5 \end{tabular} Question 4 (4 points) Which of the following statement is NOT correct? Firms don't need to follow the Residual Distribution Model rigidly. Using Residual Distribution Model, a firm minimizes flotation costs and signaling costs. The use of Residual Distribution Model may result in variable dividends. Under the Residual Distribution Model, a firm doesn't raise money from debt