Suppose the corporate tax rate is 40 %40%. Consider a firm that earns $ 2 comma 500$2,500 before interest and taxes each year wi

th no risk. The​ firm's capital expenditures equal its depreciation expenses each​ year, and it will have no changes to its net working capital. The​ risk-free interest rate is 5 % a. Suppose the firm has no debt and pays out its net income as a dividend each year. What is the value of the​ firm's equity? b. Suppose instead the firm makes interest payments of $ 700$700 per year. What is the value of​ equity? What is the value of​ debt? c. What is the difference between the total value of the firm with leverage and without​ leverage? d. The difference in ​(c​) is equal to what percentage of the value of the​ debt?