Uses proceeds to repurchase shares

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Wolfgang can borrow at 11.75 percent. The company currently has no debt, and the cost of equity is 14.5 percent. The current value of the firm is $673,000. The corporate tax rate is 35 percent. What will the value be if the company borrows $226,000 and uses the proceeds to repurchase shares? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Value of the firm $

Reference no: EM132017863

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