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Alpha Corporation has earnings before interest and tax (EBIT) per annum in perpetuity of $28,714. The tax rate is 30%. The firm is funded $50,000
Alpha Corporation has earnings before interest and tax (EBIT) per annum in perpetuity of $28,714. The tax rate is 30%. The firm is funded $50,000 of debt and $100,000 of equity. The cost of equity is 1896 and the cost of debt is 696. Given the information above, what is the appropriate discount rate if earnings before interest and after tax (EBIAT) are used to calculate the value of the firm? O A. 19.1496 OB. 13.4096 O C. 1896 D. 696 OE. None of the above
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