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4. Yam! Inc. expects its EBIT to be $71,903 every year forever. The firm currently has no debt and the cost of equity is

4. Yam! Inc. expects its EBIT to be $71,903 every year forever. The firm currently has no debt and the cost of equity is 13.691%. The firm can borrow at 9.105%. a) If the tax rate is 24.924%, what is the value of the firm? (Hint: all after-tax earnings will be distributed as dividend to stockholders). (10 points) 6

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