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3. (20 points) Streiber Publishing Company, an all-equity firm, generates perpetual earnings before interest and taxes of $2.5 million per year. It's after-tax, all-equity

3. (20 points) Streiber Publishing Company, an all-equity firm, generates perpetual earnings before interest and taxes of $2.5 million per year. It's after-tax, all-equity discount rate is 20%. The company's tax rate is 34%. a. What is the value of Streiber Publishing? b. If it adjusts its capital structure to include $600,000 of debt, what is the value of the firm? c. Explain any difference in your answers. d. What assumptions are you making when you are valuing Streiber?

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