Assume the value of a firm is $175 million dollars if it is all equity financed and operates in a world where there is a 25% corporate tax rate. If the cost of equity financing is 10% (if the firm is all equity financed) and the cost of debt financing is 6% and there are no changes in the asset structure (left-hand side of the balance sheet) if the financing changes, answer the following:

- What is the value of the firm if the firm if the firm is all equity financed?

- What is the value of the firm if the firm has 40% debt financing and 60% equity financing?

- What is the cost of equity capital (expected return on equity) if the firm if the firm is all equity financed?

- What is the cost of equity capital (expected return on equity) if the firm has 40% debt financing and 60% equity financing?