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A firm has 30M shares issued with a market value of 15 per share. It has debt issued with a market value of 104.4 M
A firm has 30M shares issued with a market value of 15 per share. It has debt issued with a market value of 104.4 M and it decides to pay a dividend of 0.5 per share. According to Modigliani and Miller, determine the debt ratio (D/E) of the firm after the dividend payment. Show your work.
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