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structure. (10 points) Currently Travel World has an EBIT of $15M, a corporate tax rate (Tc) equal to 30%, and the following capital Debt 15
structure. (10 points) Currently Travel World has an EBIT of $15M, a corporate tax rate (Tc) equal to 30%, and the following capital Debt 15 million ka - 10% Equity ? million ku -15% What should the value of the firm equal if M&M (58 (without taxes) theory is correct? What does ks. equal? What should the value of a firm equal if M&M 63 (with taxes) theory is correct? Given taxes, what does the WACC equal? What should the value of the firm equal if the Miller 77 theory is correct? Assume that Tpd=20%; Tps = 28%, Tc = 30%
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