Now that your firm has matured, you are considering adding debt to your capital structure for the first time. Your all-equity firm has a market value of $21 million and you are considering issuing $2 million in debt with an interest rate of 5% and using it to repurchase shares. You pay a corporate tax rate of 40%. Assume taxes are the only imperfection and the debt is expected to be permanent. a) What will be the total value of the firm after the change in capital structure

Joint cost cheyenne, inc. produces three products from a common input. the joint costs for a typical quarter follow: direct materials $45,000 direct labor 55,000 overhead 60,000 the revenues from each product are as follows: product a $75,000 product b 80,000 product c 30,000 management is considering processing product a beyond the split-off point, which would increase the sales value of product a to $116,000. however, to process product a further means that the company must rent some special equipment costing $17,500 per quarter. additional materials and labor also needed would cost $12,650 per quarter. a. what is the gross profit currently being earned by the three products for one quarter? $answer b. what is the effect on quarterly profits if the company decides to process product a further? $answer