Firm B has an expected EBIT of 40,000 in perpetuity and a tax rate of 28 per cent. The firm has 50,000 in outstanding debt at an interest rate of 6 per cent, and its unlevered cost of capital is 12 per cent. Required: (i) What is the value of the firm according to Modigliani and Miller (M&M) Proposition I with taxes? (ii) Should firm B change its debtequity ratio if the goal is to maximize the value of the firm? Explain.