Bigelli SpA is financed entirely with equity. The company is considering a loan of 1 million. The
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Bigelli SpA is financed entirely with equity. The company is considering a loan of €1 million. The loan will be repaid in equal instalments over the next 2 years, and it has an 8 per cent interest rate. The company’s tax rate is 35 per cent. According to MM Proposition I with taxes, what would be the increase in the value of the company after the loan?
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According to MM Proposition I with taxes the value of a firm should remain unchanged regardless of i...View the full answer
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Related Book For 
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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