Question
A company just issued $294000 of perpetual 9% debt and used the proceeds to repurchase stock. The company expects to generate 102000 of EBIT in
A company just issued $294000 of perpetual 9% debt and used the proceeds to repurchase stock. The company expects to generate 102000 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 10% and the tax rate is 15%. What is the value of the company as an unlevered firm?
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Financial Analysis With Microsoft Excel 2016
Authors: Timothy R. Mayes, Todd M. Shank
8th Edition
1337298042, 9781337298049
