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A company just issued $ 2 8 9 0 0 0 of perpetual 1 0 % debt and used the proceeds to repurchase stock. The

A company just issued $

289000

of perpetual

10 %

debt and used the proceeds to repurchase stock. The company expects to generate

106000

of EBIT in perpetuity. The company distributes all its earnings as dividends at the end of each year. The firm's unlevered cost of capital is

10 %

and the tax rate is

20 % .

Use FTE to calculate the value of the company's equity.

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