Bueller, Inc manufactures widgits for wagons and is currently worth $9,000,000. The company is financed entirely by common stock: 1,200,000 shares at $7.5 per share. The companys beta is 0.80. The company is considering substituting debt for equity by buying back shares and issuing $4,000,000 of 5 percent debt. The tax rate is 35 %. Assume M&M with taxes to answer the following question.

a. What will the value of the new levered firm be? (Show your work)

b. What will the value of equity be for the new levered company?

c. What will the beta for the new levered firm be?