What will the value of the firm be if the firm borrows

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A firm expects its EBIT to be $140,000 every year forever. The firm borrow at 10 percent. It currently has no debt and its cost of equity is 16.2 percent. The tax rate is 35 percent. What will the value of the firm be if the firm borrows $55,000 and uses the loan proceeds to repurchase shares?

Reference no: EM132467097

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