EBK CORPORATE FINANCE
EBK CORPORATE FINANCE
11th Edition
ISBN: 8220102798878
Author: Ross
Publisher: YUZU
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Chapter 16, Problem 14QP

MM and Taxes Bruce & Co. expects its EBIT to be $145,000 every year forever. The company can borrow at 8 percent. The company currently has no debt, and its cost of equity is 14 percent. If the tax rate is 35 percent, what is the value of the company? What will the value be if the company borrows $135,000 and uses the proceeds to repurchase shares''

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EBK CORPORATE FINANCE

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