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ABC Company is expecting annual EBIT $ 1 2 6 million indefinitely. The debt - to - equity ratio is 0 . 5 The corporate

ABC Company is expecting annual EBIT $126 million indefinitely. The debt-to-equity ratio is 0.5 The corporate tax rate is 35%. Cost of equity is 18%, and cost of debt is 4.2%(1) What is the WACC of ABC Company? What is the current firm value? What is the debt value? (2) What is ABC's unlevered cost of capital? (3) What is the present value of the interest tax shield?

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