Ghirardelli currently has no loans. The company's cost of equity is $12$ percent annually.

Ghirardelli expects a cash inflow of $$114,000$ in annual earnings before interest and

taxes, forever. The company faces a $23\%$ tax rate on all taxable income.

If Ghirardelli does decide to borrow money, it will do so by issuing corporate bonds. If

this happens, the interest rate on the bonds will be $6\%.$

a$.$ Currently, the market value of unleveled Ghirardelli is

$($Do not round your

intermediate calculations. Only round your final answer to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

b$.$ Ghirardelli's current market value will change to

if it borrows $$250,000$ and

uses it to back its shares of stock. $($Do not round your intermediate calculations.

Only round your final answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

a$.$ Value of the firm

b$.$ Value of the firm