Fields & Co. expects its EBIT to be $125,000 every year
Ical for Plans /ail
forever. The firm can borrow at 7 percent. The company currently has no debt, and
that the corpurit
its cost of equity is 12 percent. If the tax rate is 24 percent, what is the value of the
rent from befre.
firm? What will the value be if the company borrows $205,000 and uses the proceeds
to repurchase shares?