Question: (22 points) Evergreen Ltd. expects it EBIT to be $80,000 every year forever. The firm can borrow at 7%. It has no debt and the

(22 points) Evergreen Ltd. expects it EBIT to be $80,000 every year forever. The firm can borrow at 7%. It has no debt and the cost of equity is 10%. If the tax rate is 20%, what is the value of the firm? If it borrows $50,000 to repurchase the outstanding shares, what will be the value of the firm, cost of equity, and WACC after recapitalization? Originally, there are 10,000 shares outstanding. How many shares are repurchased

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