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Change Corporation expects an EBIT of $39,000 every year forever. The company currently has no debt,...

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Finance

Change Corporation expects an EBIT of $39,000 every yearforever. The company currently has no debt, and its cost of equityis 14 percent. The corporate tax rate is 24 percent.

  

a.

What is the current value of the company? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

b-1.Suppose the company can borrow at 10 percent. What will the valueof the firm be if the company takes on debt equal to 50 percent ofits unlevered value? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)
b-2.Suppose the company can borrow at 10 percent. What will the valueof the firm be if the company takes on debt equal to 100 percent ofits unlevered value? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)
c-1.Whatwill the value of the firm be if the company takes on debt equal to50 percent of its levered value? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)
c-2.Whatwill the value of the firm be if the company takes on debt equal to100 percent of its levered value? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

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