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A zero-growth firm faces the following situation, where all cash flows are perpetuities. sales revenue = $8,000,000 operating costs (fixed plus variable) = $6,000,000 Debt

A zero-growth firm faces the following situation, where all cash flows are perpetuities. sales revenue = $8,000,000 operating costs (fixed plus variable) = $6,000,000 Debt = $3,000,000 tax rate = 40% rD = 8% rS = 14% First find the value of the firm "indirectly". Then, confirm that the same result is obtained when the value of the firm is found directly.

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