An unlevered firm generates a retet operating profit each year in perpetuity of $$1,200,000,$ and its investors require a return of $12\%.$ The firm pays a corporate tax rate of $25\%.$ If the company decides to issue $$3,000,000$ in bonds paying $5\%$ interest and use the proceeds to retire some of the common stock, the firm's value will increase by $$750,000.$

True

False