Old School Corporation expects an EBIT of 9,000 every year forever. Old School currently has no debt,
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Old School Corporation expects an EBIT of £9,000 every year forever. Old School currently has no debt, and its cost of equity is 17 per cent. The firm can borrow at 10 per cent. If the corporate tax rate is 28 per cent, what is the value of the firm? What will the value be if Old School converts to 50 per cent debt? To 100 per cent debt?
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Related Book For 
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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