Question 4 Six Guys Meat and Potatoes is a fast food chain specializing in meatloaf. They are currently all equity, with an EBIT of $900,000 per year in perpetuity, and a required rate of return of 11.5%. Their CFO proposes that the firm's optimal capital structure is 25% debt (i.e. the debt-to-assets ratio is 0.25 ), and that they should issue bonds and repurchase shares to reach this target capital structure. The corporate tax rate is 40%, and Six Guys can borrow at 8%. What is the firm value under both the old and new capital structure, using the WACC method of firm valuation