For questions 4 and 5, use the following information: Question 4 Cede & Co. expects its EBIT to be $165,500 every year forever. The company can borrow at 8 percent. The company currently has no debt and its cost of equity is 14 percent. If the tax rate is 21 percent, what is the value of the company? Round to the nearest dollar and format as "XXX,XXX" Question 5 Cede & Co. expects its EBIT to be $165,500 every year forever. The company can borrow at 8 percent. The company currently has no debt and its cost of equity is 14 percent. Using the answer from question 4, what will the value be if the company borrows $185,000 and uses the proceeds to repurchase shares? Round to the nearest dollar and format as "XXX,XXX"
For questions 4 and 5, use the following information:
Question 4
Cede & Co. expects its EBIT to be $165,500 every year forever. The company can borrow at 8 percent. The company currently has no debt and its
Round to the nearest dollar and format as "XXX,XXX"
Question 5
Cede & Co. expects its EBIT to be $165,500 every year forever. The company can borrow at 8 percent. The company currently has no debt and its cost of equity is 14 percent. Using the answer from question 4, what will the value be if the company borrows $185,000 and uses the proceeds to repurchase shares?
Round to the nearest dollar and format as "XXX,XXX"
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