ABC Inc. is currently an all-equity firm. The company is expected to generate an EBIT (Earnings Before Interest and Taxes) of 150 million dollars forever (starting one year from now). This is given in the following table, together with the optimistic and pessimistic forecasts which have equal probabilities.

State	High	Expected	Low
EBIT	250	150	50

Assume the firm has no depreciation, no capital expenditures and no changes in net working capital. The corporate tax rate is 20%.

What is the unlevered cost of capital for ABC?

Suppose the risk-free rate is 10%. What is the maximum amount of perpetual debt that the firm could issue, such that the debt would still be risk free?