Suppose that the only market imperfection comes from the presence of corporate taxes, and that the corporate tax rate is 20%. Wish You Luck Inc. is a company with cash flows of $100 million every year (i.e., the firm is not expected to grow). Wish You Luck finance its operations targeting a 25% debt-to-value ratio. Its equity has a beta of 1.5 and its debt is risk-free. The risk free rate is 5% and the market risk premium is 8%. What is the firm value of Wish You Luck?|