Assume that the following data and conditions hold for XYZ company, an old established firm that supplies water to businesses and residential customers in a Nairobi estate: - XYZ currently has no debt capital, it's an all-equity company - Expected EBIT is 2,400.000/= and EBIT is not expected to increase overtime, so the company is in a no growth situation - The company pays all its income as dividends the company's assets would remain constant - The risk of XYZ assets and thus of its EBIT is such that its shareholders require a rate of return of 12% if no debt is used Determine the value of UF and LF. - Assume the company uses 10M debt. What is the value of equity? - What the cost of Equity of the KeL? - Assume as above but expected EBIT is 4,000,000/ and XYZ company is in 40% tax bracket