C

ojoe Couriers has perpetual EBIT of $4 million per year. The all

-

equity discount rate R

0

for Cojoe Couriers is 15 percent. The companys tax rate is 35 percent. The cost of debt

capital is 10 percent, and the company has $

10 million of debt in its capital structure.

a.

What is Cojoe Couriers firm value?

b.

What is Cojoe Couriers cost of equity (R

E

)?

c.

What is Cojoe Couriers

WACC

?