possibilities as equally likely, so the shares currently trade for $12.75. i. They know the correct value of the shares is $10.75 ? ii. They know the correct value of the shares is $14.75 ? b. Given your answer to part (a), what should investors conclude if IST issues equity? What will happen to the share price? c. Given your answer to part (a), what should investors conclude if IST issues debt? What will happen to the share price in that case? d. How would your answers change if there were no distress costs, but only tax benefits of leverage? i. They know the correct value of the shares is $10.75 ? (Select the best choice below.) Managers should issue equity for $550 million. Managers should borrow the $550 million