Leonardo Company has three divisions, and the total market value (debt and equity) of the firm is $71 million. Its debt-to-market-value ratio is 0.40, and bond indentures provide the usual protective covenants. However, they do not preclude the sale of a division. Leonardo has decided to divest itself of its Raphael division for a consideration of $20 million. In addition to this payment to Leonardo, the buyer will assume $5 million of existing debt of the division. The full $20 million will be distributed to Leonardo Company shareholders. In words, explain whether the remaining debt holders of Leonardo Company are better or worse off. Why? In theory, are the equity holders better or worse off? Why?