Problem \#5 (14 points) Ashbury Limited has an EBIT of $800,000 that it expects it will earn forever, and it pays all of it's earnings as dividends to shareholders (ie., no growth). The firm has a corporate tax rate of 40%. The Government T-bill rate is 3% and the market portfolio has an expected return of 10%. The following table summarized the firms cost of borrowing: a) Based upon this information which M\&M world or case are you using and why? (2 points) b) Calculate the value of the firm and the WACC of the firm if the firm issues $500,000 of debt. ( 5 points) c) Calculate the value of the firm and the WACC of the firm if the firm issues $750,000 of debt. (5 points) d) Should the firm choose $500,000 or $750,000 in debt? Why (2 points)