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Cornerstone Corporation expects an EBIT of $ 2 5 , 3 0 0 every year forever. The company currently has no debt, and its cost
Cornerstone Corporation expects an EBIT of $ every year forever. The company currently has no debt, and its cost of equity is percent. The company can borrow at percent and the corporate tax rate is percent.
a What is the current value of the company?
Note: Do not round intermediate calculations and round your answers to decimal places, eg b What will the value of the firm be if the company takes on debt equal to percent of its unlevered value?
Note: Do not round intermediate calculations and round your answers to decimal places, eg b What will the value of the firm be if the company takes on debt equal to percent of its unlevered value?
Note: Do not round intermediate calculations and round your answers to decimal places, eg c What will the value of the firm be if the company takes on debt equal to percent of its levered value?
Note: Do not round intermediate calculations and round your answers to decimal places, eg c What will the value of the firm be if the company takes on debt equal to percent of its levered value? Note: Do not round intermediate calculations and round your answers to decimal places, eg
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