The SLG Corp. uses no debt. The weighted average cost of capital is 12 percent. The current market value of the equity is $31 million and the corporate tax rate is 34 percent. What is EBIT?

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The SLG Corp. uses no debt. The weighted average cost of capital is 12 percent. The current market value of the equity is $31 million and the corporate tax rate is 34 percent. What is EBIT?

0

VU =

 $31,000,000

 = EBIT (1 – 0.34)/0.12;

 EBIT = $5,636,364

 

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