Question: Please help me with this problem. Help me understand and show your work. Thank you 7. MM Tool Manufacturing has an expected EBIT of $63,000

Please help me with this problem. Help me understand and show

Please help me with this problem. Help me understand and show your work. Thank you

7. MM Tool Manufacturing has an expected EBIT of $63,000 in perpetuity and a tax rate of 21 percent. The firm has $115,000 in outstanding debt at an interest rate of 7 percent and its unlevered cost of capital is 12 percent. What is the value of the company according to MM Proposition I with taxes? Should the company change its debt-equity ratio if the goal is to maximize the value of the company? Explain

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