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A problem solving For MM Proposition 1. Amish Electronics Inc. is all equity financed and generates perpetual annual EBIT of $600,000. Assume that the EBIT,
A problem solving For MM Proposition 1.
- Amish Electronics Inc. is all equity financed and generates perpetual annual EBIT of $600,000. Assume that the EBIT, occur at year end and that we are currently at the beginning of a year. Assume that Amish has a 100% payout rate, 5,000 shares outstanding, and that shareholders require a return of 5%. Assume that the tax rate is 0%. Assuming M&M Proposition I, what is the value of the firm given this information?
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Focus On Personal Finance
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
5th Edition
0077861744, 978-0077861742
