The Leonardo corporation is located in a country where there are no taxes and perfect capital markets. The corporation currently has 180,000,000 currency unites in equity and 90,000,000 in risk free debt which yields 9%. the return on its equity is 18%. Suppose Leonardo decides to issue additional equity to repurchase the 90,000,000 in debt so that it will have an all-equity capital structure. If it did this, what would the total value of the firm be after the refinancing?

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