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18. Firm Value Young Corporation expects an EBIT of $16,000 every year forever. The company currently has no debt, and its cost of equity is
18. Firm Value Young Corporation expects an EBIT of $16,000 every year forever. The company currently has no debt, and its cost of equity is 15 percent. b. Suppose the company can borrow at 10 percent. If the corporate tax rate is 35 percent, what will the value of the firm be if the company takes on debt equal to 50 percent of its unlevered value? What if it takes on debt equal to 100 percent of its unlevered value
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