Colt Systems will have EBIT this coming year of $ 29 million. It will also spend $ 14 million on total capital expenditures and increases in net working capital, and have $ 8 million in depreciation expenses. Colt is currently an all-equity firm with a corporate tax rate of 38 % and a cost of capital of 10 % . a. If Colt's free cash flows are expected to grow by 6.7 % per year, what is the market value of its equity today? b. If the interest rate on its debt is 8 % , how much can Colt borrow now and still have non-negative net income this coming year? c. Is there a tax incentive today for Colt to choose a debt-to-value ratio that exceeds 110 % ? Explain.