Lazare Corporation expects an EBIT of $22,500 every year
forever. Lazare currently has no debt, and...
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Lazare Corporation expects an EBIT of $22,500 every yearforever. Lazare currently has no debt, and its cost of equity is 12percent. The firm can borrow at 7 percent. (Do not roundintermediate calculations. Round the final answers to 2 decimalplaces.)
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a.
What is the corporate tax rate is 35 percent, what is the valueof the firm?
 Â
   Value of the firm
$Â Â Â
    Â
b.
What will the value be if the company converts to 60 percentdebt?
 Â
  Value of the firm
$Â Â Â
 Â
c.
What will the value be if the company converts to 60 percentdebt to 100 percent debt?
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a Unlevered Free cash flow EBIT1tax Rate 22500135 146250 Enterprise value without leverage or Unlevered value Unlevered Free cash flowUnlevered cost of equity 1462512
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