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The Lehigh Valley Road Running Company has no debt outstanding and its financial position is given by the following data:

Assets (book = market) $3,000,000
EBIT $500,000
Cost of Equity, rs 10%
Stock price,P0 $15
Shares outstanding,n0 200,000
Tax Rate, T (Federal-plus-state) 40%

What is the original value of the firm?

Accounting Basics, Accounting

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  • Reference No.:- M944017

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