Question: Question 10 1 pts Kaputt, Inc. has debt with a face value of $10 million trading at par. The value of the firm, if it

Question 10 1 pts Kaputt, Inc. has debt with a face

Question 10 1 pts Kaputt, Inc. has debt with a face value of $10 million trading at par. The value of the firm, if it were entirely financed by equity, would be $36 million. The company also has a 350,000 shares of stock outstanding that sell at the price of $75 per share. The corporate tax rate is 30%. What is the decrease in the value of the company due to expected bankruptcy costs? $. (accurate to $1) Hint: Apply MM Il to compute the value of the levered company. Subtract the actual value

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