Company has $$4$ million EBIT$/$year in

perpetuity. The firm has $$10$ million in bonds

outstanding. rSU $=15\%,$ rB$=10\%,$ TC$=35\%$

$1)$ What is the value of the firm?

$2)$ What is the WACC?

$3)$ What is the firm$$s cost of equity?

$4)$ How would your answers change, if you

were told EBIT would grow by $5\%$ per

year?Company has $$4$ million EBIT$/$year in

perpetuity. The firm has $$10$ million in bonds

outstanding. rSU $=15\%,$ rB$=10\%,$ TC$=35\%$

$1)$ What is the value of the firm?

$2)$ What is the WACC?

$3)$ What is the firm$$s cost of equity?

$4)$ How would your answers change, if you

were told EBIT would grow by $5\%$ per

year?