Question: 3 Question #6 (10 points) MBI LLC expects an EBIT of $2,300 every year forever. The company currently has no debt and is valued at

3 Question #6 (10 points) MBI LLC expects an EBIT of $2,300 every year forever. The company currently has no debt and is valued at $12,650. The tax rate is 23 percent. SHOW YOUR WORK 10 1) What will the value of the firm be if the company takes on debt equal to 50 percent of its unlevered value? 11 Answer 12 2) What will the value of the firm's equity after the capital restructuring? 13 Answer 14 3) Suppose the company will borrow the debt at a cost of 6 percent. What will the firm's new cost of equity be? 15 Answer 16 4) What will the firm's new WACC be? 17 Answer 18

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