Question: Answer the problem based on the framework of Modigliani and Miller Propositions. Assume that a company has earnings before interest and taxes (EBIT) of exist1,000,000

Answer the problem based on the framework of Modigliani and Miller Propositions. Assume that a company has earnings before interest and taxes (EBIT) of exist1,000,000 every year forever. The firm also has bonds with the market value of exist2,000,000. The before-tax cost of debt is 6 percent. The firm's unlevered cost of capital is 13 percent. The tax rate is 35 percent. a) Find the value of the firm. b) Find the value of equity. c) Find the firm's cost of equity. d) Find the firm's weighted average cost of capital

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