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The Maxwell Company is financed entirely with equity. The company is considering a loan of $1.84 million. The loan will be repaid in equal installments over the next two years, and it has an interest rate of 9 percent. The company’s tax rate is 40 percent.

According to MM Proposition I with taxes, what would be the increase in the value of the company after the loan?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92356337

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