Hawar International is a shipping firm with a current share price of $$4\mathrm{.}72$ and $9\mathrm{.}4$ million shares outstanding. Suppose that Hawar announces plans to lower its corporate taxes by borrowing $$20\mathrm{.}2$ million and

repurchasing shares, that Hawar pays a corporate tax rate of $30\%,$ and that shareholders expect the change in debt to be permanent.

a$.$ If the only imperfection is corporate taxes, what will the share price be after this announcement?

b$.$ Suppose the only imperfections are corporate taxes and financial distress costs. If the share price rises to $$4\mathrm{.}97$ after this announcement, what is the $PV$ of financial distress costs Hawar will incur as the result

of this new debt?

a$.$ If the only imperfection is corporate taxes, what will the share price be after this announcement?

The share price after this announcement will be $

per share. $($Round to the nearest cent.$)$