28 MM Proposition I with Taxes Bigelli SpA is financed entirely with equity. The company is considering

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28 MM Proposition I with Taxes Bigelli SpA is financed entirely with equity. The company is considering a loan of €1 million. The loan will be repaid in equal instalments over the next two years, and it has an 8 per cent interest rate. The company’s tax rate is 35 per cent. According to MM Proposition I with taxes, what would be the increase in the value of the company after the loan?

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Corporate Finance

ISBN: 9781526848093

4th Edition

Authors: David Hillier

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