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2. Dream Inc. has debt outstanding with a face value of $5.1 million. The value of the firm if it were entirely financed by equity

2. Dream Inc. has debt outstanding with a face value of $5.1 million. The value of the firm if it were entirely financed by equity would be $10.3 million. The company also has 212,000 shares of stock outstanding that sell at a price of $30 per share. The corporate tax rate is 35 percent. What is the decrease in the value of the company due to expected bankruptcy costs?

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