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Jellybean Co. expects EBIT of $250,000 every year forever Jellybean Co. currently has no debt and its cost of equity is 12%. The firm
Jellybean Co. expects EBIT of $250,000 every year forever Jellybean Co. currently has no debt and its cost of equity is 12%. The firm can borrow at 3%. The corporate tax rate is 40%. What is the value of the firm? Enter your answer rounded to two decimal places. 1250000 Correct response: 1,250,0000.01 Click "Verify" to proceed to the next part of the question. This question has 4 parts, so you will be clicking verify 4 times. Given that the firm has a value of $1,250,000 when it is all equity, what will be the value of the firm if Jellybean Co. borrows $180,000 of permanent debt and uses the proceeds to buy back stock? Enter your answer rounded to two decimal places. 1250000 Correct response: 1,322,0000.01 Click "Verify" to proceed to the next part of the question. Given that the firm has a value of $1,250,000 when it is all equity, how can Jellybean Co. maximize the value of the firm? What will be the maximum value if there are no costs to financial distress? Enter your answer rounded to two decimal places. Number Rozanski Co. currently has EBIT of $45,000 and is all equity financed. EBIT are expected to grow at a rate of 1% per year. The firm pays corporate taxes equal to 20% of taxable income. The cost of equity for this firm is 15%. What is the market value of the firm? Enter your answer rounded to two decimal places. Number Click "Verify" to proceed to the next part of the question.
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