Question
A company has an unlevered value of $700,000. An identical firm with debt has a total value of $781,000. Both have a 30% tax rate.
A company has an unlevered value of $700,000. An identical firm with debt has a total value of $781,000. Both have a 30% tax rate. According to the MM (tax model), how much debt must the levered firm have?
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Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
7th Edition
0073368717, 978-0073368719
