An unlevered firm has EBIT of $800,000 forever, a market value of $8,000,000 and pays all earnings as dividends to shareholders. The shareholders in this untevered firm have a required return of 6%, the firm has an effective tax rate of 40%, the return on T-Bills is 2% and the return on the TSX (market portfolio) is 6% The cost of debt and the firm's beta increases with the amount of debt increases: 1 Value of Debt Rp Equity Beta PV of FD Costs $2,000,000 6,0% $250,000 $4,000,000 8.0% 2.00 Based on the above information, answer the following 3 questions. 1 1. What is the value of the levered firm if it issues $2,000,000 in debt? (1 Mark) Please provide your answer with 2 decimal places. Do not use commas or units. For example if your answer is $1 234 567 enter 123457 2. What is the Cost of Equity if the firm issues $4,000,000 in debt? (1 Mark) Please provide your answer in percentage format and with 2 decimal places. Do not use commas or units. For example if your answer is 0.234567. enter 23.46 3. What is the market value of the equity if the firm Issues $4,000,000 in debt? (2 Marks) Please provide your answer with 2 decimal places. Do not une commax or units. For example if your answer is S1,234.567, enter 1234.57 /