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012. (20 marks) MM with taxes Levered Firm (LF)has an expected EBIT of $20,000 in perpetuity, and a tax rate of 40% The interest rate

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012. (20 marks) MM with taxes Levered Firm (LF)has an expected EBIT of $20,000 in perpetuity, and a tax rate of 40% The interest rate on LFS $45,000 debt is 8%, and its WACC is 10%. Unlevered (UF) is an all-equity firm, which is identical to LF, except for the capital structure (1) What is the value of UF? (2) What is the value of LF? (3) What is the rate of return on UF shares? (4) What is the hares A B 1

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