Question 3: Biggers Inc., an all-equity firm is considering a change to its capital structure. The firm today is worth $750M. The firm's management is considering borrowing $200M of debt and repurchasing their own stock with the money. The company historically has paid taxes at a rate of 30%; taxes are expected to remain at this level for the foreseeable future. a) IF the company expects to keep debt constant at $200M, what is the market cap, value of debt, and total levered value of the firm after the recapitalization?1 b) IF the company intends to grow its debt by 3% per year AND the cost of the debt is 8%, what is the market cap, value of debt, and total levered value of the firm after the recapitalization