CASE 2 (25 points) Antarctica Corporation currently has no debt on their balance sheet. It expects its EBIT to be 100,000 every year forever. Its cost of equity is 13%. Instructions: a. If the tax rate is 21%, what is the value of the firm? (5 points) b. What will the value be the value Antarctica if the firm borrows 200,000 at 6% and uses the proceeds to repurchase shares? Notice that by doing so, the firm increases its debt and accordingly decreases its equity. (5 points) C. What is the cost of equity after recapitalization? (5 points) d. What is the WACC after recapitalization? (5 points) e. What are the implications for the firm's capital structure decision? (5 points)