JYP cosmetic Corp has marginal tax rate of 35%. Cost of equity is 15%, pretax cost of debt is 6%…


JYP cosmetic Corp has ultimate tax scold of 35%. Consume of equity is 15%, pretax consume of liability is 6%. Fond body and chaffer esteem equalize sheets, JYP Corp (Book esteems, $ pet) Asset Esteem $5,000 Liability $2,500 Equity $ 2,500 $5,000 $5,000 JYP Corp (Market esteems, $ pet) Asset Esteem $7,500 Liability $2,500 Equity $ 5,000 $7,500 $ 7,500 a. JYP wants to endow in tool after a while money flows of $ 3 pet per year pretax and it continues indefinitely. What is esteem of tool, fond primal endowment of $15 pet. The tool consume of $15 pet gain be financed after a while $5 pet in new liability primally. Compute the esteem of the tool using the APV mode, sumptuous JYP gain conceal a regular liability- equity narration for this endowment. (15 marks) b. Suppose that JYP wants to binder purpose liability's agricultural at £5 pet. In this contingency we appropriate that the betray of concern shields is the identical as the betray of the liability and we abatement at the 6% scold on liability. Compute the esteem of the tool repeatedly using the APV mode.