You have decided to issue debt and buy back 1/2 of your company's stock.1. Restate the balance sheet and income statement to reflect this transaction.2 what is the value of the unelected firm?3. What is the PV of the tax shield?4. Should you do this transaction? Why or why not?Thank you!!

Clipboard Font Alignment 35 1. Restate the balance sheet and B C D O F G Unlevered Firm Levered Firm Balance Sheet Balance Sheet Assets Liabilities Assets Liabilities 100,000 Equity Equity 100,000 100,000 100,000 100,000 100,000 Rd = 5% Tax rate = 35% Price per share: $ 10.00 Number of shares: 10,000 Income Statement Income Statement EBIT 50,000 EBIT 50,000 Interest expense Interest expense Taxable income 50,000 Taxable income Taxes (17,500) Taxes Net Income 32,500 Net Income EPS EPS ROE ROE Sheet 1 +