Question 4, 1-2 sm Posts Homework Homework 6 (Suggested Due Date 11/06) Woor 25, 26100 OP od 25 Gave Colt Sy withave EBIT this coming year of 519 lot wissen noped with who tax rate of 21% and a cost of capital of 11 If Coit's free cash fow we rected to grow by prywhere more ofte if the totale on how much an Collbow now and love to give the year c. there a tax incestive today for to choose a debitovat .. Il Cuecah we are ded to grow by per year, what the martu! Cost cashowted to grow by 85 per year the main Round) Colt Systems will have EBIT this coming year of $19 million. It will also spend $5 million on total capital expenditures and increases in net working capital, and have $2 million in depreciation expenses. Colt is currently an all-equity firm with a corporate tax rate of 21% and a cost of capital of 11% a. If Colt's free cash flows are expected to grow by 8.5% per year, what is the market value of its equity today? b. If the interest rate on its debt is 9%, how much can Colt borrow now and still have non-negative net income this coming year? c. Is there a tax incentive today for Colt to choose a debt-to-value ratio that exceeds 54%? Explain