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What value will monde have after the recapitalisation

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Question - Monde Foods is currently valued at €500 million. Monde will be repurchasing €100 million of its equity by issuing a perpetual debt issue at a 10 per cent annual interest rate. The company is subject to a 30 per cent marginal tax rate. Given all the Modigliani and Miller assumptions, except the assumption that there are no taxes, what value will Monde have after the recapitalisation?

Reference no: EM132948930

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