Colin's corporation has a perpetual stream of EBIT equal to $250m per year. The cost of capital for the unlevered firm is 12%. The firm incurs $30m of interest payments for the perpetual bonds it has issued. The cost of debt is 6%. The corporate tax rate is 40%. (20 marks) a) What is the value of the unlevered firm? (3 marks) b) What is the value of the levered firm? (6 marks) c) What is the value of equity of the firm if D/E is 0.35 ? (6 marks) d) If the levered beta of the firm is 1.5, what is its unlevered beta? ( 2 marks) e) If the D/E of the firm increases from 0.35 to 0.65, how does the levered beta changes (compare to ' d ')? How do you explain this change? (3)