Question 3: (25 marks) Airplane Corporation is planning to repurchase part of its stock by issuing debt. As a result, the debt-toequity ratio will rise from 0.3 to 0.5. The firm currently has $15.5 million dollars in debt outstanding. The cost of this debt is 5%. The firm has EBIT of $10 million in perpetuity and faces a tax rate of 30%. The firm's current cost of equity is 12.5%. A) What is the value of the firm before the transaction