A firm expects its EBIT to be $ 1 4 5 3 6 4 every year forever.
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Question:
A firm expects its EBIT to be $ every year forever. The firm can borrow at percent per year. The company currently has no debt, and its cost of equity is percent per year. Suppose the tax rate is and there are no costs to bankruptcy. Calculate the value of the firm if they choose to increase their debt to equity ratio to
Express your answer rounded to the nearest dollar ie $ Do NOT use commas in your response.
Firm Value $ Blank Calculate the answer by read surrounding text.
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