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As a consultant to First Responder Inc., you have obtained the following data ( dollars in millions ) . The company plans to pay out
As a consultant to First Responder Inc., you have obtained the following data dollars in millions The company plans to pay out all of its earnings as dividends, hence g Also, no net new investment in operating capital is needed because growth is zero. The CFO believes that a move from zero debt to debt would cause the cost of equity to increase from to and the interest rate on the new debt would be What would the firm's total market value be if it makes this change? Do not round your intermediate calculations. Oper. income EBIT $ Tax rate New cost of equity rs New wd Interest rate rd a $ b $ c $ d $ e $
As a consultant to First Responder Inc., you have obtained the following data dollars in millions The company plans to pay out all of its earnings as dividends, hence g Also, no net new investment in operating capital is needed because growth is zero. The CFO believes that a move from zero debt to debt would cause the cost of equity to increase from to and the interest rate on the new debt would be What would the firm's total market value be if it makes this change? Do not round your intermediate calculations.
Oper. income EBIT
$
Tax rate
New cost of equity rs
New wd
Interest rate rd
a $
b $
c $
d $
e $
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