Lazare Corporation expects an EBIT of $19,750 every year forever. Lazare currently has no debt, and its cost of equity is 15%. The firm can borrow at 10%. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)

a. If the corporate tax rate is 35%, what is the value of the firm?

Value of the firm $

b. What will the value be if the company converts to 50% debt?

Value of the firm $

c. What will the value be if the company converts to 100% debt?

Value of the firm $

Answer rating: 100% (QA)

Following information are given EBIT 19750 Cost of equity 15 Borrowing rate 10 a Corporate tax rat... View the full answer