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Business, 18.03.2020 00:50 jcastronakaya

New School Inc. expects an EBIT of $7,000 every year forever. The firm currently has no debt, and its cost of equity is 15 percent. The firm can borrow at 8 percent and the corporate tax rate is 34 percent. What will the value of the firm be if it converts to 50 percent debt?

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New School Inc. expects an EBIT of $7,000 every year forever. The firm currently has no debt, and it...
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