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Determine what will be the value of the firm

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Question: M&M and Taxes. Wolfgang can borrow at 7.1 percent. The company currently has no debt, and the cost of equity is 13.8 percent. The current value of the firm is $595,000. What will the value be if the company borrows $310,000 and uses the proceeds to repurchase shares? The corporate tax rate is 35 percent.

Reference no: EM131732930

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