Question
How to find this? Step by Step Assume an M&M world with corporate income taxed at a rate TC = 40%. An all-equity firm has
How to find this? Step by Step
Assume an M&M world with corporate income taxed at a rate TC = 40%. An all-equity firm has the
cost of capital of 10% and the value of $100 mil. The firm issues debt and uses the entire proceeds from
this sale to repurchase some of its equity. As a result, the firm's WACC drops to 8%. What is the $ value
of the firm's equity after the repurchase?
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
5th edition
1111527369, 978-1111527365
