Problem $16-17$ Flrm Value $[$LO$2]$

Tempest Corporation expects an EBIT of $$27\mathrm{.}000$ every year forever. The company

currently has no debt, and its cost of equity is $13$ percent. The tax rate is $23$ percent.

a$.$ What is the current value of the company? $($Do not round Intermedlate

calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

$b-1.$ Suppose the company can borrow at $7$ percent. What will the value of the firm be if

the company takes on debt equal to $60$ percent of its unlevered value? $($Do not

round Intermedlate colculations and round your answer to $2$ decimal places,

e$.$g$.,32\mathrm{.}16.)$

b$-2.$ Suppose the company can borrow at $7$ percent. What will the value of the firm be if

the company takes on debt equal to $100$ percent of its unlevered value? $($Do not

round Intermedlate coleulations and round your onswer to $2$ decimal places,

e$.$g$.,32\mathrm{.}16.)$

c$-1.$ What will the value of the firm be if the company takes on debt equal to $60$ percent

of its levered value? $($Do not round Intermedlate caleulatlons and round your

answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

c$-2.$ What will the value of the firm be if the company takes on debt equal to $100$

percent of its levered value? $($Do not round Intermedlate calculations and round

your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$