HZA Ltd has $100 million of perpetual debt outstanding with a cost of debt of 9% p.a. which is expected to remain unchanged. The company is currently subject to a corporate tax rate of 30%. Following...

HZA Ltd has $100 million of perpetual debt outstanding with a cost of debt of 9% p.a. which is expected to remain unchanged. The company is currently subject to a corporate tax rate of 30%.

Following national elections, the incoming government unexpectedly passes a law that increases the corporate tax rate for all companies to 35%.

Assuming perfect capital markets with positive corporate taxes, what will be the
most likely
immediate change in the market value of the company?