Mm model with corporate taxesan unlevered firm has a value, Ask an Expert

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MM Model with Corporate Taxes

An unlevered firm has a value of $800 million. An otherwise identical but levered firm has $80 million in debt. Assuming the corporate tax rate is 40%, use the MM model with corporate taxes to determine the value of the levered firm. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000.

$ million

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