Question 4 [40 marks Biller Industries plc is a global haulage equipment and scaffolding manufacturer. The company has never borrowed before but feels that in order to maximize growth and increase value, a debt issue is required. Currently the firm has 50 million shares outstanding with a share price of 1.50. The profit before taxes is forecasted to be 25 million pounds. Biller Industries requires 30 million to fund their expansion plans. The firm feels that they could borrow 45 million and use the additional 15 million to also buy back shares in the company. The corporate tax rate is 23%. d. Determine the cost of equity for Biller Industries plc before the debt issue. What two further pieces of information would be required to determine the cost of equity for Biller Industries plc after the debt issue. (6 marks) e. If the "Modigliani-Miller model" (Debt and Taxes) model holds and capital gains tax is 28%, corporation tax is 23% and personal tax rate on interest income is 45%, estimate the value of Biller Industries plc. (6 marks) f. Determine the personal tax rate on interest income at which the tax advantage of debt is zero. (8 marks)