The Mcfj Corporation Is A Firm With Regular Free Cash Flows 60 000 And No Corpor (1)

The MCFJ corporation is a firm with regular free cash flows $60,000 and no corporation tax. MCFJ uses $300,000 of 10% debt financing, and the equity cost of capital to an unleveled firm in the same risk class is 12%.

1) What is the value of the firm according to MM with corporate taxes?

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2) What is the firm’s equity cost of capital?