in q14, for Aquarius’s, it use EBIT(1-tax)/wacc to get total firm value while in q18, it use EBIT(1-tax)/r (return of equity) to get Vu, then Vl=Vu+tD, what Vu and Vl mean? why in q18, when use EBIT to get Vu, no need to be after tax? Thanks.
Vu is value of the firm (unlevered) so without depreciation tax shield Vl is levered or with the tax shield I havent looked at the problem but if they assume the MM propositions without taxes then you would not use the after tax number to get value of the firm.