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Compute Galaxy firm value

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Question - AGENCY COSTS AND CAPITAL STRUCTURE - Galaxy Enterprises has earnings before interest and taxes of $9 million and $90 million of debt outstanding with a required rate of return of 7.3%. The required rate of return on assets in the industry is 12%. The corporate tax rate is 21 %, but there are no personal taxes. The present value of Galaxy's bankruptcy costs is $18 million. Compute Galaxy's firm value.

Reference no: EM133123372

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