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A firm has an operating profit of $300,000, interest of $35,000, and a tax rase of 40 porcent. The form has an after - tax
A firm has an operating profit of $300,000, interest of $35,000, and a tax rase of 40 porcent. The form has an after - tax cost of oebt of 5 percent and a cost of equity of 15 percent. The firmis target capital structure is set at a mix of 50 percent deft and 50 percent equify. Assiming this as the optimum capital structure, the value of the firm is A. $1,4 million B. \$1. 8 mition C. $22 milion D. 50.0 milion
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