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A company just issued $ 3 1 2 0 0 0 of perpetual 4 % debt and used the proceeds to repurchase stock. The company

A company just issued $

312000

of perpetual

4 %

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

118000

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

11 %

and the tax rate is

30 % .

What is the value of the company as an unlevered firm?

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