Mall and Taxes ( LOZ ) Elzear & Co. expects its EBIT to be $ / 4, 000 every year forever . The firm can borrow at ?' percent . Elzear currently has no debt , and its cost of equity is 12 percent . If the tax rate is 35 percent , what is the value of the firm ? What will the value be if the company borrows $ 125, 000 and uses the proceeds to repurchase shares ?" M&M and Taxes ( LO2 ) In Problem 14 . what is the cost of equity after recapitalization ? What is the WACO ? What are the implications for the firm 's capital structure decision