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What is the value of equity

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Suppose the corporate tax rate for Company A is 38%. Consider a firm that earns $1380 before interest and taxes each year with no risk. The firm's capital expenditures equal its depreciation expenses each year, and it will have no changes to its net working capital. The risk-free interest rate is 5.50%.

Suppose the firm makes interest payments of $408 per year. What is the value of equity?

NOTE: Submit your answers with 4 decimals after the dot. Do not include the "tiny_mce_markerquot; sign

Reference no: EM133275423

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