Question: Question 13 3 points Save Antwer Use the following Information to answer questions 13-18. AAA Corporation and BBB Corporation are identical in every way except
Question 13 3 points Save Antwer Use the following Information to answer questions 13-18. AAA Corporation and BBB Corporation are identical in every way except their capital structures, AM Corporation, an all-equity firm has 45 million shares of stock outstanding, currently worth $50 per share. BB8 Corporation uses leverage in its capital structure. The market value of Bee's debt is $400 mil and its cost of debt is 35 percent. Each firm is expected to have earnings before interest and tax of 5155mil. in perpetuity. Assume that every investor can borrow at 3.5 percent per year. Corporate tax rate is 35% 013. What is the value of 088 corporations? 52.250ml 52,390 mit 52.110 mil 52236 mil 52.264
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