Remex(RMX) currently has no debt in its capital structure. The beta of its equity is 1.64.

For each year into the indefinitefuture, Remex's free cash flow is expected to equal $25

million. Remex is considering changing its capital structure by issuing debt and using the proceeds to buy back stock. It will do so in such a way that it will have a 25%

debt-equity ratio after thechange, and it will maintain thisdebt-equity ratio forever. Assume thatRemex's debt cost of capital will be 6.24%.

Remex faces a corporate tax rate of 30%.

Except for the corporate tax rate of 30%,

there are no market imperfections. Assume that the CAPMholds, therisk-free rate of interest is 4.8%,

and the expected return on the market is 10.56%.

Using the informationprovided, fill in the table below. Using the information providedabove, fill in the tablebelow:(Round to three decimalplaces.)

	Debt-Equity Ratio	Debt Cost of Capital	Equity Cost of Capital	Weighted Average Cost of Capital
Before change in capital structure	0	N/A	%	%
After change in capital structure	0.25	6.24%	%	%

b. Using the information provided and your calculations in part (a), determine the value of the tax shield acquired by Remex if it changes its capital structure in the way it is considering. The value of the tax shield is $million. (Round to two decimalplaces.) Enter your answer in each of the answer boxes