167 Modigliani andMiller's world of taxes . Roxy Broadcasting was originally anall-equity firm with abefore-tax value of$30,000,000.

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167 Modigliani andMiller's world of taxes.

Roxy Broadcasting was originally anall-equity firm with abefore-tax value of$30,000,000. Roxy now pays taxes at a25% rate. What is the value of Roxy under the25/75debt-to-equity capitalstructure? Under the75/25capitalstructure?

169 Equity value in a levered firm.

Air Seattle has an annual EBIT of $1,000,000, and the WACC in the unlevered firm is22%. The current tax rate is25%. Air Seattle will have the same EBIT forever. If the company sells debt for$2,500,000

with a cost of debt of16%, what is the value of equity in the unlevered firm and in the leveredfirm? What is the value of debt in the leveredfirm? What is thegovernment's value in the unlevered firm and in the leveredfirm?

Posted Date: May 19, 2024 12:08 AM

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167 Modigliani andMiller's world of taxes . Roxy Broadcasting was originally anall-equity firm with abefore-tax value of$30,000,000.

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