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Consider a world where the M&M Corporate Taxes Capital Structure theory is true, then answer the following question. An all-equity firm currently has a market value of $622.09. The firm decides to issue debt in order to repurchases $126.48 in equity. No other changes are made to the firm. The debt will be issued at par with an interest rate of 5.8%. The firm is in the 30% tax bracket. What is the new value of the firm? Enter your answer to the nearest $.01. Do not use the $ sign in your answer.

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Financial Management, Finance

Category:- Financial Management
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