What will the value be if cede borrows 210000 and uses the, Ask an Expert

Accounting

Cede & Co. can borrow at 9 percent. Cede currently has no debt, and the cost of equity is 15 percent. The current value of the firm is $625,000. The corporate tax rate is 35 percent.

Required:

What will the value be if Cede borrows $210,000 and uses the proceeds to repurchase shares? (Do not include the dollar sign ($).)

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M950477

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