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Assume that J. C. Quarter has a 2018 EBIT of $250 million, ksU= 10%, kd = 4%, Under M&M 58 find VU, VL, ksL and

Assume that J. C. Quarter has a 2018 EBIT of $250 million, ksU= 10%, kd = 4%,

Under M&M 58 find VU, VL, ksL and the WACC if the firm issues $60 million in debt.

Under M&M 63 and a tax rate of 40% find the value of VL and ksL.

Calculate the WACC. What happens to the 63 WACC as more debt is added?

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