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5) X/Z firm is now all equity firm, where the firm expects to have $225.25 as earnings before interest and taxes, in perpetuity. Currently the
5) X/Z firm is now all equity firm, where the firm expects to have $225.25 as earnings before interest and taxes, in perpetuity. Currently the firm is going to restructure its capital by borrowing S250 which cost of 8%. If the cost of equity is 18% and the cooperate tax rate is 40% then: 1- What would be the value of the firm before restructuring its capital (before borrowing) 2- What would be the value of the firm after restructuring its capital (after borrowing). 3- What would be the value of levered equity? 4- What would be the cost of equity after leverage? 5- What would be the firms WACC
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