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Elzear & Co. expects its EBIT to be $61,000 every year forever. The firm can borrow at 7%. Elzear currently has no debt, and its

Elzear & Co. expects its EBIT to be $61,000 every year forever. The firm can borrow at 7%. Elzear currently has no debt, and its cost of equity is 14%. If the tax rate is 35%, what is the value of the firm? Value of the firm =? What will the value be if the company borrows $148,000 and uses the proceeds to repurchase shares? Value of the firm = ?

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