Question: Air Seattle from Problem 11 has lost its not for profit status
Air Seattle from Problem 11 has lost its not-for-profit status, and the corporate tax rate is now 35%. If the value of Air Seattle was $5,000,000 as an all-equity firm, what is the value of Air Seattle under a 50/50 debt-equity ratio? Assume that the $5,000,000 is the after-tax value of the unlevered firm.
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