Happy Company is an all-equity firm with a value of $800,000. Happy is currently considering whether debt financing would increase its value. The proposed capital restructuring involves issuing a new debt worth $400,000 with an interest rate of 8%. The number of outstanding shares is 32,000 before the capital restructuring and the corporate tax rate is 35%. The cost of equity is currently 15%.

(a) Calculate the present value of tax shield. (Show your calculations).

=140000

(b) Calculate the firm value and the cost of equity after the capital restructuring.

Please answer b thanks