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Capital Structure and Value TAX 30.00% Risk free and interest 6.00% Debt 380,000 No Debt EBIT 104,000 Interest payments - Income before taxes 104,000 Tax

Capital Structure and Value TAX 30.00% Risk free and interest 6.00% Debt 380,000 No Debt EBIT 104,000 Interest payments - Income before taxes 104,000 Tax 31,200 Net income (cash to equity) 72,800 Cost of equity 5.60% Value of equity 1,213,333 Cash to debt holder (interest) Cost of debt Value of debt Enterprise value

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