Question 6 (Total 13 marks) FIN222 Corp, a grocery store chain. In 2019, FIN222 Corp had earnings before interest and taxes of $1.13 billion, and interest expenses of $300 million. Given a corporate tax rate of 35%. FIN222 Corp may be able to deduct interest expenses from their taxable income. The deduction reduces the taxes they pay and thereby increases the amount available to pay investors. In doing so, the interest tax deduction increases the value of the corporation. Required: a) Explain how the interest tax deduction increases the value of FIN222 Corp? Provide relevant example. (8 mark) b) The optimal capital structure depends on market imperfections. Discuss how FIN222 Corp devise the optimal capital structure on taxes, financial distress costs, agency costs, and asymmetric information