The US federal corporate income tax rate reduced from 35% to 21% following the substantive enactment of US tax reform on 22 December 2017. This necessitated a re-measurement of the existing US deferred tax position in the period to 31 December 2017. As a result, the tax expense for the year ended 30 June 2018 included a non-cash tax accounting write off of 49.0 million. Accordingly, this resulted in a loss for the year ended 30 June 2018 and basic and diluted loss per share. (3) For the years ended 30 June 2022, 2021, 2020 and 2018, potential ordinary shares are anti-dilutive, as their inclusion in the diluted loss per share calculation would reduce the loss per share, and hence have been excluded. For the year ended 30 June 2019, potential ordinary shares have been treated as dilutive, as their inclusion in the diluted earnings per share calculation decreases earnings per share. vii Figure 1: Balance sheet for Manchester United football club. Annual accounts 2022. In November 2022, the Glazer family put the football club up for sale "commencing a process to explore strategic alternatives" as outlined by several leading newspapers. In tandem Manchester United's debt (proxied by total liabilities) to equity ratio increased from 2021 to 2022. Q1) Explain how this change in capital structure has influenced the value and the cost of equity capital of Manchester United football club. (40\%) Q2) Read the top line from Figure 1. Explain how and why this tax rate change impacted the value of Manchester United football club. (20\%) Q3) Assuming that no suitable bidder is found / the sale falls through for Manchester United football club, what issues may arise when the Glazer family try to recapitalise the club using equity sales? (40\%)