Hawar International is a shipping firm with a current share price of $$5\mathrm{.}33$ and $9\mathrm{.}6$ million shares outstanding. Suppose

that Hawar announces plans to lower its corporate taxes by borrowing $$9\mathrm{.}2$ million and repurchasing shares, that Hawar

pays a corporate tax rate of $25\%,$ and that shareholders expect the change in debt to be permanent.

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

b$.$ Suppose the only imperfections are corporate taxes and financial distress costs. If the share price rises to $$5\mathrm{.}38$ 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 be the share price after this announcement?

The share price after this announcement will be $ per share. $($Round to the nearest cent.$)$