XYZ Corporation is considering a significant change in its capital structure policy. The firm currently operates with an all$-$equity capital structure. The market value of the firm's equity is $$500,000,$ with $10,000$ shares outstanding. The firm is contemplating a restructuring by taking on debt of $$200,000$ at an interest rate of $8\%$ and using the proceeds to repurchase shares. The corporate tax rate is $35\%.$ Assume the Earnings Before Interest and Taxes $($EBIT$)$ are expected to be $$100,000$ indefinitely. a$.$ Explain the impact of financial leverage on a firm's Weighted Average Cost of Capital $($WACC$)$ and overall firm value under the Modigliani and Miller Proposition I $($M&M theory Proposition I$)$ with corporate taxes. $(5$ marks$)$ b$.$ Answer the following questions: $1)$ Calculate the cost of equity for $($RU$)$ before the restructuring. $(5$ marks$)2)$ The leveraged firm's value $($VL$)$ after restructuring, considering the interest tax shield. $(5$ marks$)3)$ The firm's cost of equity after restructuring. $(5$ marks$)$