XYZ Corporation expects an EBIT of $8,000 every year forever. XYZ Corporation currently has no debt, and its cost of equity is 20 percent. The firm can borrow at 8 percent. If the corporate tax is 40 percent:

a) What is the value of the firm? Firm Value = $

b) What will the value be if XYZ Corporation issues $9,600 of debt and uses the proceeds to buy back stock? Firm Value = $

c) What will the value be if XYZ Corporation issues $24,000 of debt and uses the proceeds to buy back stock? Firm Value = $