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8. Daimler Corp is operating in a country U where the corporate tax is 40%, personal income tax on bond investment is 28% while the

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8. Daimler Corp is operating in a country U where the corporate tax is 40%, personal income tax on bond investment is 28% while the personal tax on stock is 20%. Assume the company EBIT is $12 million and the cost of equity with zero debt is 10%. (a) If Daimler current has $6 million total market value of debt financing, what would be the value of the company of Daimler Corp in this country U? (3 points) I (b) What is the proportion of debt (wd) and equity (ws) financing for Daimler Corp with financial leverage? (3 points)

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