In the Modigliani-Miller theory of capital structure with corporate taxes, suppose an unlevered firm has one million shares outstanding and trading at $25 per share. The firm wants to issue $ 5 million of debt and buy back $ 5 mil of equity. The debt is considered risk-free. If the corporate tax rate is 30%, then:

	A.	The firm value will go up by $ 1.5 mil and the shares will trade at $25.
	B.	The value of equity will drop to $20 mil and shares will trade at $26.50
	C.	The value of equity will be $21.50 mil and share price will remain at $25
	D.	None of the above