use the following information to respond to the next four multiple choice questions. Firm R currently has $1,500,000 of debt outstanding with a before tax annual coupon of 5.8% a constant EBIT of $2,000,000 and 450,000 shares outstanding at a market price $27.00. The firm is considering issuing $2,000,000 of debt at a before tax cost of 6.25% and using the proceeds to repurchase stock at the new post announcement market price. If this plan is implemented, it is ecpected that the required return on equity would rise to 11%, The firm's marginal tax rate is 30%

#37 what is the market value of the firm before the announcement of the issue of the new debt

14,196,000

13,650,000

15,561,000

14,742,000

# 38 what is the estimated value of the firm after the new debt issue

16,068,436

16,961,127

15,473,309

14,878,182

#39 what is the estimated share price after the capital structure change

32.11

30.92

33.89

29.73

#40 how many shares outstANDing after the capital structure change

436,308

398,035

413,3444

382,726