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According to the information for two firms (levered and unlevered firms) given below, compute the value of the levered firm including the values of the
According to the information for two firms (levered and unlevered firms) given below, compute the value of the levered firm including the values of the tax-shield benefits of the debt and bankruptcy-agency costs. Assuming zero growth and 100% dividend payout, permanent debt, so treated as a perpetuity. NOTE: PLEASE SHOW HOW YOU COMPUTE EACH OF THE ITEMS. : $50.000 $40.000 : : 10% : 12% Debt amount for levered firm NOI for each firm Interest rate for the debt Stock market return Tax rate for each firm Treasury bill rate Present value for bankruptcy-agency cost Beta () coefficient for unlevered firm : 20% : 5% : $38.000 0.9
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