KOT Industries is worth $2,000 today. Equity is worth $1,000 and stockholders require a return of 10%. Debt (bonds) is also worth $1,000. The bonds have a face value of $1,000, an annual coupon of $50 and bondholders require a yield of 5%. The bonds are perpetuities. The tax rate is 40%. Calculate the operating cash flows for KOT using the table. Calculate KOT's weighted average cost of capital using the before tax cost of debt. What is the present value of KOT's cash flows? (Assume the cash flows are a perpetuity.) Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b d e $1,000 $1,333 $1,500 $1,750 $2,000 KOT Industries Operating Cash Flows EBIT - Interest Earnings Before Tax - Taxes (@40%) Net Income OCF Net Income + Interest $217