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A company has EBIT of $250,000 in perpetuity. Its cost of debt and equity at different levels of debt is given below. The tax rate
A company has EBIT of $250,000 in perpetuity. Its cost of debt and equity at different levels of debt is given below. The tax rate is 35%.
Calculate the values of A, B, C, and D.
| Debt | Kd | Ke | Enterprise | WACC |
|---|---|---|---|---|
| 0 | 12% | 14.1% | A | B |
| $400,000 | 13% | 16% | C | D |
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International Finance
Authors: Maurice D Levi
5th Edition
0415774594, 9780415774598
