Colt Systems will have EBIT this coming year of $$12$ million. It will also spend $$5$ million on total capital expenditures and increases in net working capital, and have $$2$ million in depreciation expenses. Colt is currently an all$-$equity firm with a corporate tax rate of $35\%$ and a cost of capital of $10\%$

a$)$ If Colt is expected to grow by $5\%$ per year, what is the market value of its equity today?

b$)$ If the interest rate on its debt is $7\%,$ how much can Colt borrow now and still have nonnegative net income this coming year?

c$)$ What would be Colt$$s debt$-$to$-$value ratio and is there tax incentive to exceed it$?$ Explain.