Find the stock price according to mm proposition1

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Reference no: EM1345426

Consider two firms, With and Without, that have identical assets that generate identical cash flows. Without is an all-equity firm with 1 million shares outstanding that trade for a price of $24 per share. With has 2 million shares outstanding and $12 million dollars in debt at an interest rate of 5%. According to MM Proposition1, what is the stock price for With?

Reference no: EM1345426

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