What is the value of the firm after the restructuring

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A company has an EBIT of $5,095 in perpetuity. The unlevered cost of capital is 17.18%, and there are 29,450 common shares outstanding. The company is considering issuing $11,160 in new bonds at par to add financial leverage. The proceeds of the debt issue will be used to repurchase equity. The YTM of the new debt is 12.21% and the tax rate is 38%. What is the value of the firm after the restructuring?

Reference no: EM132578101

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