An unlevered firm with a market value of 1 million has, Ask an Expert

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An unlevered firm with a market value of $1 million has 50,000 shares outstanding. The firm restructures itself by issuing 200 new par bonds with face value $1,000 and 8% coupon. The firm uses the proceeds to repurchase outstanding stock. In considering the newly levered versus formerly unlevered firm, what is the breakeven EBIT? Ignore taxes.

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Financial Management, Finance

Category:- Financial Management
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