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a firm currently has no debt (all equity) and has total value of $117 million with an unlevered cost of capital of 11%. Suppose the
a firm currently has no debt (all equity) and has total value of $117 million with an unlevered cost of capital of 11%.
Suppose the firm wants to recapitalize to include $44 million of perpeptual debt. The return of the newly issued debt is 7% and the corporate tax rate is 35%. What is the firm's new dollar value of equity after the recapitalization ?
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Financial Modeling
Authors: Simon Benninga
2nd Edition
0262024829, 9780262024822
