Jeff Lowes Zoo (JFZ) is an animal and entertainment park in Florida with a current share price of $20.00 and with 20 million shares outstanding. Suppose that Jeff Lowe announces plans to lower its corporate taxes by borrowing $80 million and using the proceeds to repurchase shares.

Suppose that JFZ pays corporate taxes of 25% and that shareholders expect the change in debt to be permanent. Assume that capital markets are perfect except for the existence of corporate taxes and financial distress costs.

a) If the price of JFZ's stock rises to $20.51 per share following the announcement, what is the present value of JFZ's financial distress costs?

b) Name three types of indirect costs associated with financial distress.

Note: Show your work in detail.