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Question 5 (10 points) Qiyang Toy Outlet has unlevered cost of capital of 12%. The corporate tax rate is 34%. And the perpetual expected earnings

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Question 5 (10 points) Qiyang Toy Outlet has unlevered cost of capital of 12%. The corporate tax rate is 34%. And the perpetual expected earnings before interest and tax is $2400. The company has $3000 in permanent bonds outstanding that have an 896 coupon and pay interest annually. The bonds are selling at the par value. The total number of share outstanding is 1000 . a) What is the value of the unlevered firm? (1 point) b) What is the value of the levered firm? (2 points) c) What the share price of the levered firm? (2 points) d) What is the tax adjusted weighted average cost of capital? (1 points) What is the capital structure of the firm? (2 points) What is the cost of equity? ( 2 point)

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