The current expected EBITDA of Funny co. stock is $15 million each year. The unlevered return on equity is 12%. The current debt value is $80 million and it is kept constant. Assume that the corporate tax rate is 26% and that there is no personal taxation. If the corporate tax rate is unexpectedly decreased to 24%, what is the equity return caused by this event? 

Answer rating: 100% (QA)

To calculate the equity return caused by the decrease in the corporate tax rate well use the formula ... View the full answer