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27. Now that your firm has​ matured, you are considering adding debt to your capital structure...

27. Now that your firm has​ matured, you are considering adding debt to your capital structure for the first time. Your​ all-equity firm has a market value of $21 million and you are considering issuing ​$2.1 million in debt with an interest rate of 9​% and using it to repurchase shares. You pay a corporate tax rate of 25​%. Assume taxes are the only imperfection and the debt is expected to be permanent.
a. What will be the total value of the firm after the change in the capital​ structure?
b. What will be the value of the remaining equity after the change in the capital​ structure?

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

ANSWER IS SHOWN IN MILLIONS OF DOLLARS AS NOTHING IS MENTIONED AND ROUNDED TO 4 DECIMALS

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