Bird Enterprises has no debt. Its current total value is $47 million. Ignoring taxes, what will the

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Bird Enterprises has no debt. Its current total value is $47 million. Ignoring taxes, what will the company’s value be if it sells $18.4 million in debt? Suppose now that the company’s tax rate is 23 percent. What will its overall value be if it sells $18.4 million in debt? Assume debt proceeds are used to repurchase equity.

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Essentials of Corporate Finance

ISBN: 978-1260013955

10th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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