Problem 8 Intro An all-equity firm has a market value of $700,000 and expected annual earnings of $46,000. Suppose that earnings are representative of cash flows. The cost of capital is 14%. Ignore taxes. |Attempt 1/3 for 10 pts. Part 1 What is the firm's P/E ratio? 1+ decimals Submit Part 2 |Attempt 1/3 for 10 pts. The firm now borrows $100,000 and uses the proceeds to repurchase $100,000 of its own shares. The cost of capital for debt is 8% and the cost of capital for the levered equity is 15%. What is the new cost of capital? 3+ decimals Submit | Attempt 1/3 for 10 pts. Part 3 What is the P/E ratio for levered equity? 1+ decimals Submit