A company has a ebit to be 100000 every year forever. the, Ask an Expert

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A company has a EBIT to be $100,000 every year forever. The company can borrow at 5%, has no debt and a cost of equity of 15%. If the tax rate is 25 %, what is the value of the firm? What will the value be if the company borrows $130,000 and uses the proceeds to repurchase shares?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9293209

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