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A company has an EBIT of $4,520 in perpetuity.The unlevered cost of capital is 15.98%, and there are 25,750 common shares outstanding.The company is considering

A company has an EBIT of $4,520 in perpetuity.The unlevered cost of capital is 15.98%, and there are 25,750 common shares outstanding.The company is considering issuing $9,910 in new bonds at par to add financial leverage.The proceeds of the debt issue will be used to repurchase equity.The YTM of the new debt is 11.06% and the tax rate is 33%.What is the value of the firm before the restructuring?

$18,477

$18,951

$19,425

$19,899

$20,373

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