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Eclipse Corporation uses no debt. The weighted average cost of capital is 8%. Required 1. If the current market value of the equity is $18

Eclipse Corporation uses no debt. The weighted average cost of capital is 8%.

Required

1. If the current market value of the equity is $18 million and there are no taxes, what is EBIT?

2. Suppose the corporate tax rate is 35%. What is EBIT in this case? What is the WACC? Explain.

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