as a consultant to first responer inc. you have obtained the following data (dollars in millions). the company plans to pay out all of its earnings as dividends, hence g=0. also no net new investment in operation cappital is needed because growth is zero. the cfo beliees that a move from zero debt to 20% debt would cause the cost of equity to increase from 10% to 12%, and the interest rate on the new debt would be 8%. what would the firm's total market value be if it makes this change? hints: find the fcf:, which is equal to nopat=ebit(1-t) because no new operating capital is needed, and then divide by (wacc-g).

oper income(ebit) $800 tax rate 40%

new cost of equity 12% new wd 20%

interest rate rd 8%

a. 2982

b. 3314

c. 3682

d. 4091

e. 4545

PLEASE SHOW ALL WORK!!!!