Question
A company just issued $178000 of perpetual 7% debt and used the proceeds to repurchase stock. The company expects to generate 126000 of EBIT in
A company just issued $178000 of perpetual 7% debt and used the proceeds to repurchase stock. The company expects to generate 126000 of EBIT in perpetuity. The company distributes all its earnings as dividends at the end of each year. The firms unlevered cost of capital is 11% and the tax rate is 25%. Use FTE to calculate the value of the companys equity.
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The Meaningful Money Handbook
Authors: Pete Matthew
1st Edition
0857196510, 978-0857196514
