MacKinnon Co. currently has EBIT of $39,000 and is all equity financed. EBIT is expected to...
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MacKinnon Co. currently has EBIT of $39,000 and is all equity financed. EBIT is expected to stay at this level indefinitely. The firm pays corporate taxes equal to 22% of taxable income. The cost of equity for this firm is 17%. What is the market value of the firm? Enter your answer rounded to two decimal places. 178941.18 Correct response: 178,941.1810.01 Click "Verify" to proceed to the next part of the question. Suppose the firm has a value of $178,941.18 when it is all equity financed. Now assume the firm issues $42,000 of debt paying interest of 7% per year and uses the proceeds to retire equity. The debt is expected to be permanent. What will be the value of the firm? Enter your answer rounded to two decimal places. 188181.18 Correct response: 188,181.1810.01 What will be the value of the equity after the debt issue? Enter your answer rounded to two decimal places. 146181.18 Correct response: 146,181.1810.01 Cineforifto nennaart to tha novt nart of the question MacKinnon Co. currently has EBIT of $39,000 and is all equity financed. EBIT is expected to stay at this level indefinitely. The firm pays corporate taxes equal to 22% of taxable income. The cost of equity for this firm is 17%. What is the market value of the firm? Enter your answer rounded to two decimal places. 178941.18 Correct response: 178,941.1810.01 Click "Verify" to proceed to the next part of the question. Suppose the firm has a value of $178,941.18 when it is all equity financed. Now assume the firm issues $42,000 of debt paying interest of 7% per year and uses the proceeds to retire equity. The debt is expected to be permanent. What will be the value of the firm? Enter your answer rounded to two decimal places. 188181.18 Correct response: 188,181.1810.01 What will be the value of the equity after the debt issue? Enter your answer rounded to two decimal places. 146181.18 Correct response: 146,181.1810.01 Cineforifto nennaart to tha novt nart of the question
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1260566093
10th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Posted Date:
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