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12.M&M and Taxes. Nagambie Farms Ltd can borrow at 6.7%. Nagambie currently has no debt, and the cost of equity is 12.9%. The current value

12.M&M and Taxes. Nagambie Farms Ltd can borrow at 6.7%. Nagambie currently has no debt, and the cost of equity is 12.9%. The current value of the firm is $595 000. What will be the value if Nagambie borrows $310 000 and uses the proceeds to repurchase shares? The corporate tax rate is 30%. LO 13.

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