An unlevered firm has EBIT of $800,000 forever, a market value of $8,000,000and pays all earnings as dividends to shareholders The shareholders in this unlevered firm have a required return of 65, the firm has an effective tax rate of 40%, the return on T-Bills is 24 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: Equity Beta Value of debt $2,000,000 $4,000,000 RC 6.0% 6.59 PV of FD Costs $150.000 1.7 1. What is the Value of the levered firm if it issues 2,000,000 in debt? 2. What is the cost of Equity if the firm issues $4,000,000 in debt? 3. What is the market value of the firm if it issues 4,000,000 in debt