$ % 5 n recovered workbooks? Your recent changes were saved. Do you want to continue working wher xv fx Long Answer - Question 3 (12 marks) D Recolumn A bioloan dem meridrug in the Long Answer - Questionl3 (12 marks) E H Craft Beer Enterprbes (CHE) expects its eaming before interest and taxes (EBIT) to fluctuate with the economy according to the distribution presented in the chart below. The earings are expected to continue in perpetulty. The company has 1 milion shares outstanding and no debt in its capital structure. It paysal earings in dividends. Based on the following information, answer questions 1 and 2 that follow Corporate tax rate 36.00% Personal tax rate paid on capital gain or dividend Income 20.00% Personal taxe rate paid on interest Income 50.00% Shareholder required return funlevered) 11.00% Note that if you don't have any data in the cells above, it is likely because you havent input your student number in the yellow highlighted cell on the cover tab. State of the Economy Fal Good SON SON 3.10 4.40 Probability EBIT (in millions Is Q1. What is the expected after tax earnings available to shareholders assuming CBE has no debt? What is CBEs value without Leverage? (5 marks) Q2. Che decides to sell bands and use the proceeds to buy back 630,000 of its shares. What is the distribution of after-tax earnings available to shareholders for the two states of the economy of the firm kisues debt and buys back the shares (only corporate taxes, ne personal taxes)? Interest cost on debitis SM. What is the expected distribution to shareholders? What is CBE's value after leverage? [7 marks) State of the Economy Fair Probably SON SOK ELTP milions! 5 3.103 4.40 Good