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A firm has EBIT of $30 million. It has debt of $100 million and the cost of debt is 7%. Its unlevered cost of capital
A firm has EBIT of $30 million. It has debt of $100 million and the cost of debt is 7%. Its unlevered cost of capital is 10% and tax rate at 35%.
a) Whats its unlevered firm value?
b) Whats its levered firm value?
c) Whats its equity value?
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