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ABC Co. has an expected EBIT (earings before interest and taxes) of 563.000 in perpetuity and a tax rate of 21 percent. Its unlevered cost

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ABC Co. has an expected EBIT (earings before interest and taxes) of 563.000 in perpetuity and a tax rate of 21 percent. Its unlevered cost of capital is 12 percent. The stocks outstanding are 100,000 shares. The firm issues $115,000 perpetual debt at 7% to exchange for equity Please calculate the followings: 1. What is the value of the company's stock after issuing debt (SL)? 2. What is the stock price before the announcement of debt issuance? 3. What is the stock price after the announcement of debt issuance? 4. How many shares of stock need to be exchanged? 5. What is the stock price after the debt issuance

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