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Suppose that Pfizer has expected EBIT of $13.82 billion for the coming year and that figure is expected to grow at 4% in the future

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Suppose that Pfizer has expected EBIT of $13.82 billion for the coming year and that figure is expected to grow at 4% in the future (l.e., operating prohts are a growing perpetuity). Pfizer faces a corporate tax rate of 25%. Suppose that Pfizer's cost capital with no debt is 6%. What is the unlevered value of Pfizer? (Please provide your answer and how you calculated it.) (10 points) (b) If Pfizer decided to borrow an amount equal to 25% of its unlevered value and Pfizer's cost of debt would be 3.5%, what is the total firm value of Phzer if the firm borrows the money? Assume that Pfizer faces no costs of distress, will issue perpetual debt, interest is a tax deductible expense (i.e. payable out of pre-tax dollars), and that it's managers always make value maximizing decisions (so leverage won't affect pre-tax operating cash flows). (Please provide your answer and how you calculated it.) (10 points)

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