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Rozanski Co. currently has EBIT of $45,000 and is al equity financed. EBIT is expected to stay at this level indefinitely. The firm pays corporate taxes equal to 25% of taxable income. The cost of equity for this firm is 16% What is the market value of the firm? Enter your answer rounded to two decimal places. 210937.50 Correct response: 210,937.5+0.02 Click "Verity to proceed to the next part of the question. This question has 3 paits, so you will be clicking verify 3 times. Suppose the firm has a value of $210,937.5 when it is all equity financed. Now assume the firm issues $40,000 of debt paying interest of 7% per year and uses the proceeds to retire equity. The debt is expected to be permanent What will be the value of the firm? Enter your answer rounded to two decimal places. 210937.50 Correct response: 220,937.530.01 What will be the value of the equity after the debt issue? Enter your answer rounded to two decimal places. 170937.50 Correct response: 180,937.520.01 Click "Verity to proceed to the next part of the question. Suppose that with the $40,000 of debt and no costs to financial distress the firm has a value of $220,937.5 Suppose, in addition: 1) The debt issue raises the possibility of bankruptcy. 2) The firm has a 20% chance of going bankrupt after 3 years. 3) If it goes bankrupt, it will incur bankruptcy costs of 80,000 4) The discount rate is 16% What is the value of the firm? Enter your answer rounded to two decimal places. Number The common stock and debt of Windows Phone Corp. are valued at $58 million and $22 million, respectively. Investors currently require a 12% return on the common stock and an 8% return on the debt. There are no taxes. Calculate the weighted average cost of capital. Enter your answer as a percentage. Do not include the percentage sign in your answers. Enter your answer rounded to 2 DECIMAL PLACES WACC = 10.90 Correct response: 10.9+0.02 Click "Verify to proceed to the next part of the question. This question has 3 parts, so you will be clicking verity 3 times. 1 Windows Phone Corp. issues an additional $15 million of debt and uses this money to retire common stock, what will be the expected return on the stock? Assume that the change in capital structure does not affect the risk of the debt, and recall that the WACC under the Irital capital structure is 10.9%. Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your answer founded to 2 DECIMAL PLACES, "E= 13.39 Correct response: 13.410.02 Click "Verify to proceed to the next part of the question Suppose you prefer the original capital structure with a 12% return on the common stock and a WACC of 10.9%. If you have $1,500 to invest, how much should you invest in the stock and bonds of the restructured firm (which have returns of 13.4% and 8%, respectively) to obtain the same return as an investment in the stock of the original firm? Enter your answers rounded to 2 DECIMAL PLACES Amount into equity = Number Amount into debt = Number Myers Corporation is currently all equity financed and has a value of $55 million. Investors currently require a return of 19.10 percent on common stock. Myers pays no taxes. Myers plans to issue $30 million of debt with a return of 7.5 percent and use the proceeds to repurchase common stock. What will be the value of the firm after the debt issue? Please state your answer in millions Enter your response below 55 Correct response: 55million This question has 4 parts, so you will be clicking verify 4 times Given that the firm will still have a value of $55 million, what will be the value of the equity after the debt issue? Please state your answer in millions Enter your response below. 25 Correct response: 25million Given that the value of the equity after the debt issue will be $25, what will be the expected return on the stock after the debt issue? Enter your answer as a percentage and round to 2 decimal places. Do not enter the percentage symbol. Enter your response below. Number Marcus Corporation is currently all equity financed and has a value of $85 million. Investors currently require a return of 14.9 percent on common stock. Marcus has a marginal tax rate of 30 percent. Marcus plans to issue $30 million of debt with a return of 4.2 percent and use the proceeds to repurchase common stock What will be the value of the firm after the debt issue? Please state your answer in millions rounded to two decimal places. Enter your response below. 94 Correct response: 94+0.01 million This question has 4 parts, so you will be clicking verify 4 times. Given that the value of the firm after the debt issue will be $94 milion, what will be the value of the equity after the debt issue? Please state your answer in millions rounded to two decimal places. Enter your response below 64 Correct response: 6430.81million Given that the value of the equity after the debt issue will be $64 million, what will be the expected return on the stock after the debt issue? Enter your answer as a percentage and round to 2 decimal places. Do not enter the percentage sign as part of your answer. Enter your response below Number