Silver Corp. expects an EBIT of $550,000 every year forever. The firm currently has no debt, and
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Silver Corp. expects an EBIT of $550,000 every year forever. The firm currently has no debt, and its cost of equity is 20%. The firm is thinking of borrowing $650,000 at 12% and buying back shares. The corporate tax rate is 40%. 23. What would be the value of the levered firm? What would be the firm's cost of equity and WACC, respectively, after the recapitalization?
Related Book For
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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