Cornerstone Corporation expects an EBIT of $25,100 every year forever. The company currently has no debt, and its cost of equity is 15%.

a.) What is the current value of the company?

b.) Suppose the company can borrow at 10%. If the corporate tax rate is 21%, what will the value of the firm be if the company takes on debt equal to 50 percent of its unlevered value? What if it takes on debt equal to 100% of its unlevered value ?

c.) What will the value of the firm be if the company takes on debt equal to 50% of its levered value? What if the company takes on debt equal to 100% of its levered value?