Capital Structure Analysis Expected EBIT $600,000Growth rate in EBIT, gL 0%Cost of equity, rs 10%

The Rivoli Company has no debt outstanding, and its financial position is given by the following data:

Shares outstanding, no 200,000

Tax rate, T (federal-plus-state) 25%

A) What is Rivoli's intrinsic value of operations (i.e., its unlevered value)? Round your answer to the nearest dollar. What is its intrinsic stock price? Its earnings per share? Round your answers to the nearest cent.

B)Rivoli is considering selling bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with 30% debt based on market values, its cost of equity, rs, will increase to 12% to reflect the increased risk. Bonds can be sold at a cost, rd, of 7%. Based on the new capital structure, what is the new weighted average cost of capital? Round your answer to three decimal places.

C)Based on the new capital structure, what is the new stock price? Do not round intermediate calculations. Round your answer to the nearest cent.