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An unlevered corporation BlueSky has a value of $200 million. An identical but levered corporation has $40 million in debt and a 6% cost of
An unlevered corporation BlueSky has a value of $200 million. An identical but levered corporation has $40 million in debt and a 6% cost of debt. Assuming a corporate tax rate of 30%, and a personal tax rate of 20%, long-term capital gain tax rate of 15% and financial distress cost of 8% of debt. What is the value of the levered corporation?
Please solve in excel
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