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  3. frederick & co. expects its ebit to be $85,000

Frederick & Co. expects its EBIT to be $85,000 every year forever. The firm can...

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Accounting

Frederick & Co. expects its EBIT to be $85,000 every year forever. The firm can borrow at 11 percent. Frederick currently has no debt, and its cost of equity is 20 percent. If the tax rate is 34 percent, the value of the firm is $ ___. The value will be $ ___ if Frederick borrows $56,000 and uses the proceeds to repurchase shares. (Do not include the dollar signs ($). Round your answers to 2 decimal places. (e.g., 32.16))

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