Raviv Industries has $111 million in cash that it can use for a share repurchase. Suppose instead Raviv invests the funds in an account paying 11% interest for one year.

a. If the corporate tax rate is 40%, how much additional cash will Raviv have at the end of the year net of corporatetaxes?

b. If investors pay a 28% tax rate on capitalgains, by how much will the value of their shares haveincreased, net of capital gainstaxes?

c. If investors pay a 34% tax rate on interestincome, how much would they have had if they invested the $111 million on theirown?

d. Suppose Raviv retained the cash so that it would not need to raise new funds from outside investors for an expansion it has planned for next year. If it did raise newfunds, it would have to pay issuance fees. How much does Raviv need to save in issuance fees to make retaining the cash beneficial for itsinvestors? (Assume fees can be expensed for corporate taxpurposes.)