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Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $5.76 million of debt financing

Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $5.76 million of debt financing at

12% interest. The all-equity firm will have a value of $9.6 million and 480,000 shares outstanding. The levered firm will have 192,000 shares outstanding.

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