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A firm has 100,000 shares of stock outstanding.The firm is considering borrowing $1.3 million at 7.5% interest and using the loan proceeds to repurchase 20,000

A firm has 100,000 shares of stock outstanding.The firm is considering borrowing $1.3 million at 7.5% interest and using the loan proceeds to repurchase 20,000 shares of stock. What is the value of the firm? Ignore Taxes.

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