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What will the value of the firm be

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Question - Assume that the M&M with Corporate Taxes theory is true.  New Schools expects an EBIT of $90 every year forever. The firm currently has no debt, and its cost of equity is 8.3 percent. The firm can borrow at 4.1 percent and the corporate tax rate is 29 percent. What will the value of the firm be if it issues $200 in debt to buy back equity?

Reference no: EM133135644

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