Question: Recall Enterprises has no debt. Its current total value is $90 million. Ignoring taxes, what will Recalls value be if it sells $30 million in

Recall Enterprises has no debt. Its current total value is $90 million. Ignoring taxes, what will Recall’s value be if it sells $30 million in debt? Suppose now that Recall’s tax rate is 40 percent. What will its overall value be if it sells $30 million in debt? Assume debt proceeds are used to repurchase equity.

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