Question: 1 ) Now let s re - consider MM s value if the Francostani government decides to institute a 2 0 % corporate income tax.

1) Now lets re-consider MMs value if the Francostani government decides to institute a 20% corporate income tax. Specifically, if MM remains to be an all-equity financed firm, what will happen to MMs earnings (& hence their dividends) if the government institutes a 20% corporate income tax ? What will happen to the stock price? What will happen to firm value?

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