their outstanding equity. Assume the company faces a tax rate of 25%, has a cost of debt of 10%, and faces an unlevered cost of capital of 15%. The value of the unlevered firm is $5,000,000 while the value of the levered firm is suggesting the present value of the tax interest shield is The decline in the market value of equity after the restructuring is Despite this increase in the firm's cost of equity, the firm's WACC decreases to and the the value of the overall firm $5,625,000;$625,000;$562,500;18%;13.38%; increases $5,250,000;$250,000;$562,500;18%;13.38%; decreases $5,625,000;$625,000;$562,500;13.38%;18%; increases $4,375,000;$625,000;$625,500;18%;13.38%; increases their outstanding equity. Assume the company faces a tax rate of 25%, has a cost of debt of 10%, and faces an unlevered cost of capital of 15%. The value of the unlevered firm is $5,000,000 while the value of the levered firm is suggesting the present value of the tax interest shield is The decline in the market value of equity after the restructuring is Despite this increase in the firm's cost of equity, the firm's WACC decreases to and the the value of the overall firm $5,625,000;$625,000;$562,500;18%;13.38%; increases $5,250,000;$250,000;$562,500;18%;13.38%; decreases $5,625,000;$625,000;$562,500;13.38%;18%; increases $4,375,000;$625,000;$625,500;18%;13.38%; increases