You are interested in the value of Gemini Corporation and its cost of capital. Suppose you believe that the assumptions of Miller-Modigliani's Proposition 1 (without taxes) are valid. (a) Find the value of the company, the new cost of equity and WACC if the currently unlevered company, valued at $2,400,000 issues debt of $850,000 at 7% expected return. You can assume that the company uses this borrowing to repurchase stocks. Assume also that the initial cost of equity was 12%. (b) Consider your answer this time with a corporate tax rate of 35%. You may assume that the value of the unlevered firm is still $2,400,000 even though taxes have gone from 0 to 35%.