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What will the value be if haji real estate borrows

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Reference no: EM132601950

Question 1: Haji Real Estate expects an EBIT of Br. 10,000 every year forever. Haji Real Estate can borrow at 7%. Suppose Haji Real Estate currently has no debt and its cost of equity is 17%. If the corporate tax rate is 35%, what is the value of the firm? What will the value be if Haji Real Estate borrows Br. 15,000 and uses the proceeds to repurchase stock?

Reference no: EM132601950

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