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Rozanski Co. currently has EBIT of $34,000 and is all equity financed. EBIT are expected to grow at a rate of 5% per year. The
Rozanski Co. currently has EBIT of $34,000 and is all equity financed. EBIT are expected to grow at a rate of 5% per year. The firm pays corporate taxes equal to 27% of taxable income. The cost of equity for this firm is 16%. What is the market value of the firm? Enter your answer rounded to two decimal places. 236918.18 Correct response: 225,636.36+0.01 Click "Verify" to proceed to the next part of the question. Suppose the firm has a value of $225,636.36 when it is all equity financed. Now assume the firm issues $80,000 of debt paying interest of 9% per year and uses the proceeds to retire equity. The debt is expected to be permanent. What will be the value of the firm? Enter your answer rounded to two decimal places. Number What will be the value of the equity after the debt issue? Enter your answer rounded to two decimal places
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