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Now that your firm has matured, you are considering adding dobt to your captai structure for the fint time. Your all-equity fim has a market

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Now that your firm has matured, you are considering adding dobt to your captai structure for the fint time. Your all-equity fim has a market value of $20 milicen and you ars considering insuing $2.0 million in debt with an interest rate of 5% and using it to repurchase shares. You poy a corporate tax rate of 25%. Assume taxes are the only imperfoction and the debt is oxpected to be permanent. a. What will be the total vilue of the fim after the change in capital structure? b. What will be the value of the remaining equity afinr the charge in capital structure? a. The total value of the firm after the change in capital structure is 5 milion. (Round to two decimal places.) b. The value of the remaining equity aker the change in capital structure is $ milion. (Round to two decimal places.)

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