Assume you are in an M&M world. ABC Corporation is unlevered and is valued at $640,000. ABC is currently deciding whether including debt in their capital structure would increase live value. Under consideration is issuing $300,000 in new debt with an 8% interest rate. ABC would repurchase $300,000 of stock with the proceeds of the debt issue. 'there are currently 32,000 shares outstanding and their effective marginal tax bracket is zero. a) What will die firm value be after the changer? b) What will die share once be and how many shares will be outstanding after die change? Now assume you are in a Modigjiaru Miller world with corporate taxes added. XYZ Corp. is all equity financed with 5,000 shares outstanding world $7 each They tax planning on issuing $10,000 of n-w p-ipetual debt at die 8% market rate of interest. The effective tax rate is 25% c) What is the market value of the firm's outstanding equity after they make die debt for equity exchange