$6.$ Marsian Sweets Company has a debt$-$to$-$equity ratio of $0\mathrm{.}4.$ The required return on

the firm$$s unlevered equity is $14\%,$ and the pretax cost of the firm$$s debt is $7\%.$ Sales

revenue for Marsian is expected to remain stable indefinitely at last year$$s level of

$$17,500,000.$ Variable costs amount to $60\%$ of sales. Marsian is taxed at the corporate tax rate of $30\%.$ The firm distributes all of its earnings as dividends at the end of each year.

a$.$ If Marsian were financed entirely by equity, how much would it be worth?

b$.$ What is the required return on the firm$$s levered equity $($Rs$)$

c$.$ Use the WACC method to calculate the value of Marsian. What is the value of the

firm$$s equity? What is the value of the firm$$s debt?

d$.$ Use the flow to equity method to calculate the value of Marsian$$s equity