LMN is currently all equity financed. The equity of the firm is worth 7 million. LMN is
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LMN is currently all equity financed. The equity of the firm is worth 7 million. LMN is planning to issue bonds with a value of 4 million and a \(10 \%\) coupon. LMN is paying \(30 \%\) corporate tax. Individual investors are paying \(20 \%\) tax on capital gains and dividends, and \(25 \%\) tax on interest income. In a Miller equilibrium, what is the new value of the firm after the bond issue?
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Aun Ali
I am an Associate Member of Cost and Management Accountants of Pakistan with vast experience in the field of accounting and finance, including more than 17 years of teaching experience at university level. I have been teaching at both undergraduate and post graduate levels. My area of specialization is cost and management accounting but I have taught various subjects related to accounting and finance.
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Related Book For 
Lectures On Corporate Finance
ISBN: 9789812568991
2nd Edition
Authors: Peter L Bossaerts, Bernt Arne Odegaard
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