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4. An all-equity firm has 175,000 shares of common stock outstanding, currently worth $20 per share. Its equity holders require a 20% return. The firm

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4. An all-equity firm has 175,000 shares of common stock outstanding, currently worth $20 per share. Its equity holders require a 20% return. The firm decides to issue $1 million of 10% debt and use the proceeds to repurchase common stock. According to Modigliani-Miller, what is the market value of the firm's equity after the repurchase? Assume a 30% corporate tax rate

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