(1) What is the value of the firm according to MM with corporate taxes? If the following is true: EBIT: $100,000 rd: 12% Tc: 30% Debt: $500,000 rsU: 16%
$475,875
$528,750
$587,500
$646,250
$710,875
(2) What is the firm's cost of equity? If the following is true:
EBIT: $100,000 rd: 12% Tc: 30%
Debt: $500,000 rsU: 16%
21.0%
23.3%
25.9%
28.8%
32.0%