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Letang Corporation expects an EBIT of $23,000 every year forever. The company currently has no debt, and its cost of equity is 14.5 percent. The company can borrow at 8 percent and the corporate tax rate is 35.
Requirement 1: What is the current value of the company?
Requirement 2: (a) What will the value of the firm be if the company takes on debt equal to 60 percent of its unlevered value? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) (b) What will the value of the firm be if the company takes on debt equal to 100 percent of its unlevered value?
Requirement 3: (a) What will the value of the firm be if the company takes on debt equal to 60 percent of its levered value? (b) What will the value of the firm be if the company takes on debt equal to 100 percent of its levered value?
How much money can be withdrawn at the end of 20 years if $6,000 is deposited at the end of each year for 12 years, and no deposits are made after, where the fund earns 7.5 percent?
The difference between a broker and a dealer is
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