The Chief Financial Officer (CFO) of the Q14.22T Company is interested to identify the cost of capital and value of the company. Currently, the Q14.22T is an all-equity company. Earnings before interest and taxes (EBIT) for the company is expected to be $71,082 forever, and the cost of capital is currently 14.22 percent. The corporate tax rate applicable to this company is 35.0 percent.

Requirement-A. Calculate the market value of Q14.22T. <1 mark>

Requirement-B. Suppose Q14.22T floats a $26,087 debt issue and uses the proceeds to reduce share capital. The interest rate is 11.39 percent. Calculate the new value of the business. <1 mark>

Requirement-C. Calculate the new value of equity. <1 mark>

Requirement-D. Calculate the cost of equity of Q14.22T after the debt issue. <1 mark>

Requirement-E. Calculate the weighted average cost of capital. <1 mark>

Requirement-F. What are the implications for capital structure?<1 mark>