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The Piano Movers can borrow at 7.8 percent. The firm currently has no debt, and the cost of equity is 15 percent. The current value of the firm is $680,000. What will the value be if the firm borrows $140,000 and uses the proceeds to repurchase shares? The corporate tax rate is 35 percent.

$820,000

$540,000

$729,000

$571,000

$750,000

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Financial Management, Finance

Category:- Financial Management
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