What would be the increase in the value of the company

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Reference no: EM131997116

Question: The Maxwell Company is financed entirely with equity. The company is considering a loan of $1.7 million. The loan will be repaid in equal principal installments over the next two years, and it has an interest rate of 7 percent. The company's tax rate is 30 percent.

According to MM Proposition I with taxes, what would be the increase in the value of the company after the loan?

Reference no: EM131997116

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