Carter Co. has a value of $70 million. Buleigh is otherwise identical to Carter Co., but has $28 million in debt. Suppose that both firms are growing at a rate of 6%, the corporate tax rate is 38%, the cost of debt is 8%, and Carter's cost of equity is 13% (assume rsU is the appropriate discount rate for the tax shield).

Use the Modigliani and Miller theory extension for growth to complete the following table:

Carter Co. Burleigh Co.

Value of firm Given: $70 mill Select from: $82.16 mill, $79.44 mill, 77.57 mill, or $80.80 mill

Value of Stock Given: $70 mill Select from: $52.80 mill, $49.57 mill, $54.16 mill, or $51.44 mill

Cost of Equity Given 13% Select from: 15.72%, 15.59%, 15.65%, or 15.82%