XYZ Corporation has the following data available: Earnings before interest and taxes of P850,000; corporate income tax
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Question:
XYZ Corporation has the following data available:
Earnings before interest and taxes of P850,000;
corporate income tax rate, 32%;
cost of debt, 10%;
cost of capital in the absence of loans, 15%.
(Use the MM approach with corporate tax.)
Required
a. Calculate the total market value of XYZ corp. no leverage
b. Calculate the total market value of the company with a debt of P 1,000,000
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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