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An unlevered company has an EBIT 5m. If the tax rate is 30%, unlevered cost of capital 12% and the company takes 8m new loan,
An unlevered company has an EBIT 5m. If the tax rate is 30%, unlevered cost of capital 12% and the company takes 8m new loan, the new value of equity will be approximately?(m&m case 2; hint: calculate VL = Vu + PV of tax shield)
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Introduction to Finance Markets Investments and Financial Management
Authors: Melicher Ronald, Norton Edgar
15th edition
