Find what market value of the firm after the announcement

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Problem 1: A firm has a current market value of INR 250 crores. The current cost of equity is 15% and the tax rate is 20 percent. If the firm has announced to issue a per- petual debt of INR 50 crores at 6% interest rate to change the capital structure of the firm, what is the market value of the firm after this announcement?

Reference no: EM132706287

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