Bluegrass Mint Company has a debt$-$equity ratio of $\mathrm{.}30.$ The required return on the

company's unlevered equity is $13\mathrm{.}7$ percent and the pretax cost of the firm's debt is $7\mathrm{.}5$

percent. Sales revenue for the company is expected to remain stable indefinitely at last

year's level of $$20,600,000.$ Variable costs amount to $60$ percent of sales. The tax rate is

$25$ percent and the company distributes all its earnings as dividends at the end of each

year.

a$.$ If the company were financed entirely by equity, how much would it be worth? $($Do

not round intermediate calculations and enter your answer in dollars, not millions

of dollars, rounded to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89)$

b$.$ What is the required return on the firm's levered equity? $($Do not round intermediate

calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

c$-1.$ Use the weighted average cost of capital method to calculate the value of the

company. $($Do not round intermediate calculations and enter your answer in

dollars, not millions of dollars, rounded to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89)$

c$-$ What is the value of the company's equity? $($Do not round intermediate calculations

and enter your answer in dollars, not millions of dollars, rounded to $2$ decimal

places, e$.$g$.,1,234,567\mathrm{.}89)$

c$-$ What is the value of the company's debt? $($Do not round intermediate calculations

and enter your answer in dollars, not millions of dollars, rounded to $2$ decimal

places, e$.$g$.,1,234,567\mathrm{.}89)$

d$.$ Use the flow to equity method to calculate the value of the company's equity. $($Do not

round intermediate calculations and enter your answer in dollars, not millions of

dollars, rounded to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89)$