please solve all parts a b c d and take clear photo of solution providing all necessary calculations and explanation

8. (10 points) You are asked to evaluate Liti Corporation's capital Structure and make a recommendation on additional debt issuance. You have found the following data about Liti: - The value of Liti's equity is $2mln. Liti's stock has a beta of 1.15. - The company's debt is rated BBB. The current interest rate on BBB bonds is 10%. Liti has $500,000 of long-term debt. - The corporate tax rate is 40%, the risk-free rate is 6%, the stock market risk premium is 5.5%. (a) What is the value of Liti as a company? What is the present value of Liti's tax shield and its unlevered assets? (b) Find the beta of Liti's debt. What is the expected return of Liti's unlevered assets? What is the weighted average cost of capital? Assume that Liti is planning to issue additional $500,000 of debt and hold debt proceeds as cash. You have calculated that after the additional debt issue, Liti's rating will decline to BB and the interest rate on debt will rise to 10.5%. Assume that the beta of cash is zero. (c) What is the new beta of Liti's debt? What's the new value of Liti's tax shields? What is the value of Liti's equity? (d) Determine the new beta and the expected return of Liti's equity