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What would be the levered value of the equity under the plan

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Reference no: EM132755450

Problem 1: You currently run an all equity firm that has 1,000,000 shares of stock outstanding and a share price of $30.00. You estimate that the cost of equity is 21 percent and the tax rate is 36 percent. Your CFO has proposed using $19,500,000 in debt to repurchase shares. What would be the levered value of the equity under this plan?

Reference no: EM132755450

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