DCorp currently has EBIT of $31000 and is all-equity-financed. EBIT is expected to stay at this level indefinitely. The firm pays corporate taxes equal to 38% of taxable income. The discount rate for the firm's projects is 10%. i. What is the market value of the firm? [4 marks] ii. Now assume the firm issues $52000 of debt paying interest of 7% per year and uses the proceeds to retire equity. The debt is expected to be permanent. What will happen to the total value of the firm (debt plus equity)? [4 marks] iii. Recompute your answer to part (ii) under the following assumptions: the debt issue raises the possibility of bankruptcy; the firm has a 30% chance of going bankrupt after 5 years; if it does go bankrupt, it will incur bankruptcy costs of $200000. The discount rate is 10%. Should the firm issue the debt? (4 marks)