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A firm is expected to generate an EBIT of $52,000 in perpetuity. It has an optimal debt-to-equity ratio of 1/3. If the before-tax cost of

A firm is expected to generate an EBIT of $52,000 in perpetuity. It has an optimal debt-to-equity ratio of 1/3. If the before-tax cost of debt is 7% and its levered cost of equity is 12%, what is the value of the firm? The corporate tax rate is 20%.

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