What is the value of this firm if you ignore taxes

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Reference no: EM131908167

Thompson & Thomson is an all equity firm that has 500,000 shares of stock outstanding. The company is in the process of borrowing $8 million at 9 percent interest to repurchase 200,000 shares of the outstanding stock. What is the value of this firm if you ignore taxes? (hint: with no taxes you are in case I of MM, so the value of the firm doesn’t change with capital structure changes)

Reference no: EM131908167

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