Value of the firm-lazare corporation

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Lazare Corporation expects an EBIT of $16,500 every year forever. Lazare currently has no debt, and its cost of equity is 13%. The firm can borrow at 9%. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)

a. If the corporate tax rate is 35%, what is the value of the firm?

Value of the firm $

b. What will the value be if the company converts to 40% debt?

Value of the firm $

c. What will the value be if the company converts to 100% debt?

Value of the firm $

Reference no: EM132660560

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