Question: (CHAPTER 16) (For this problem, assume that all Miller-Modigliani assumptions hold.) Apples & Oranges is currently an all-equity firm. Its management expects its Earnings

(CHAPTER 16) (For this problem, assume that all Miller-Modigliani assumptions hold.) Apples

(CHAPTER 16) (For this problem, assume that all Miller-Modigliani assumptions hold.) Apples & Oranges is currently an all-equity firm. Its management expects its Earnings Before Interest and Taxes to equal $450,000 every year in the future. Its cost of equity is 8%. The firm faces a 28% tax rate for all of its taxable income each year. Apples & Oranges is contemplating taking a $320,000 loan at 6.00% annual interest rate. The values in the table below are related to the firm's valuation. Fill it out! Round all dollar values to WHOLE dollar, and do NOT use the "$" signs. (You can type with or without the commas.) If the firm remains all-equity If the firm takes the $320,000 loan Firm's total value $ Firm's debt value $ Firm's equity value $ $ $ $ HINT: You won't need to use one of the numbers that is given.

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