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Q1)Zemma Corp: is all equity financed with 20 million sharesoutstanding. Their shares trade at $15 per share. Now Zemma Corpwill change its capital structure by issuing 100 million in debt.The 100 raised by the issue will be used to buyback shares at afair price. Assume that debt will be permanent debt and that theappropriate cost of debt will be 5%. The current tax rate is40%.Before the transaction, what is the market value of the equitytoday? And what will be the new total firm value when the recap isannounced?What will be the new share price when the recap isannounced?At the conclusion of this transaction, How many sharesoutstanding will Gemma Mine corp have?At the conclusion of this transaction, what will be the debt toequity ratio?