A firm has 100 000 shares of stock outstanding. The firm is considering borrowing $1.3 million at 7.5% interest and using the loan proceeds to repurchase 20 000 shares of stock. What is the value of the firm? Ignore taxes.$5.20 million$5.98 million$6.50 million$7.25 millionA firm has a debt-equity ratio of 1.0. The required return on the firm’s assets is 16.1% and the pre-tax cost of debt is 9.1%. Ignore taxes. What is the firm’s cost of equity?15.3 .2#.1!.7%A company is an all-equity firm that has projected earnings before interest and taxes (EBIT) of $500 000 forever. The current cost of equity is 15% and the tax rate is 33%. The company is in the process of issuing $1.5 million of bonds at par that carry a 6% annual coupon. What is the unlevered value of the firm (in millions)? (Note: You should use MM capital structure model with corporate taxes but without personal taxes and bankruptcy costs.)$2.05 million$2.23 million$2.86 million$3.50 millionAccording to the information from Question 9 what is the levered value of the firm (in millions)?_______$3.95 million$3.76 million$3.22 million$2.96 million
