5) Jet Corporation expects an EBIT of $40,000every year forever. The company currently has no debt, and its cost of equity is 10 percent a) What is the current value of the company? 40,000 . 10-4000 b) Suppose the company can borrow at 5 percent. If the corporate tax rate is 20 percent, what will the value of the firm be if the company takes on debt equal to 50 percent of its unlevered value? What if it takes on debt equal to 100 percent of its unlevered valuer 100% -4,000 8.5 (10.20) = 1600 50 le 2.000X,5 (1-2) c) What will the value of the firm be if the company takes on debt equal to 50 percent of its levered value? What if the company takes on debt equal to 100 percent of its levered value 20,000 X 800 = 16,000, nuo To,000 X 1600 = 640,000,000