What would be the market value of the company's equity in the previous problem, in the following
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What would be the market value of the company's equity in the previous problem, in the following situation: if the firm were to obtain debt in the market, it would obtain it with a pre-tax cost of 30% (tax rate of 35%) . The risk-free rate in the market is 16% after taxes, while the average market return after taxes is 22%. The firm's Beta for the current capital structure (60% debt, 40% equity) is 1.43 and the firm expects to maintain that same capital structure in the future.
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1285190907
8th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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