Blue Inc. has 200 shares outstanding. The firm has no debt, a corporate tax rate of 40%, and its operating income is $100 per year forever with certainty. The risk-free interest rate is 10%. What is the stock price now?

The firm decides to borrow a perpetual debt at the risk free rate of 10% with coupon payment of $50 a year and uses the proceeds to buy back shares. What is the stock price after the share buyback?

What is the present value of debt tax shield for Blue Inc.?