Linkcomn expects an Earnings before Taxes of 75000$ every year. The firm currently has 100% Equity and cost of raising equity is 10%. If the company can borrow debt with an interest of 10%. What will be the value of the company if the company takes on a debt equal to 60% of its levered value? What will be the value of the company if the company takes on a debt equal to 40% of its levered value? Assume the company's tax rate is 25%. (Must show the steps of calculation)
