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A company just issued $287000 of perpetual 10% debt and used the proceeds to repurchase stock. The company expects to generate 118000 of EBIT in

A company just issued $287000 of perpetual 10% debt and used the proceeds to repurchase stock. The company expects to generate 118000 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 15% and the tax rate is 40%. Use APV method to calculate the value of the company with leverage.

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