Global Data Positioning Inc. has no debt outstanding and its financial position is given by the following data: Assets (book = market) $3, 000, 000 EBIT $500, 000 Cost of Equity, r_s 10% Stock price, P_0 $15 Shares outstanding, n_0 200, 000 Tax Rate, T (Federal-plus-state) = 40% What is the original value of the firm? What is the original WACC? The firm is considering selling bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with 30% debt based on market values, its cost of equity, rs, will increase to 11% to reflect the increased risk. Bonds can be sold at a cost, rd of 7%. Global Data Positioning Inc. is a no-growth firm. Hence, all its earnings are paid out as dividends Earnings are expected to be constant over time. With leverage, what is the value of the firm? What is the new WACC? What is the value of the debt the firm now carries? What is the value of the equity