In Class Exercise Capital Structure The Sixers Corporation is currently an all-equity firm. It needs to raise $2.25 million in additional funds. After raising the funds it expects it expects EBIT to be $875,000 per year in perpetuity. The firm's unlevered cost of capital, rs', is 13%, and its before tax cost of debt, re, is 6%. Part A - No Tax Case 1. If there are no corporate taxes, under MM what is the value of Sixers Corporation if it employs stock to raise the funds needed? 2. Alternatively, what happens tor (required return on levered equity) and firm value if it uses debt to raise the funds needed? 3. What happens to the WACC? Part B-35% Corporate Tax Rate 1. What is the all-equity value of Sixers Corporation? 2. What is the firm value if $2.25 million in debt is employed? 3. What is the new r? 4. What is the new WACC