solve both For questions 24 to 25, please read the following case:...
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solve both 
For questions 24 to 25, please read the following case: Suppose the corporate tax rate is 40%. Consider a firm that earns $1,000,000 before interest and taxes each with no risk. The firm's capital expenditures equal its depreciation expenses each year, and it will have no changes to its net working capital. The risk-free interest rate is 4% year 24. Suppose the firm has no debt and pays out its net income as a dividend each year. That is the value of the firm's equity? A. $15,000,000 B. $10,000,000 C. $576,923 D. $300,000 E.$100,000,000 25. Suppose instead the firm makes interest payments of $200,000 per year. What is the value of equity? A. $461,538 B. $480,000 C. $10,000,000 D. $9,500,000 E. $12,000,000
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