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Assume capital markets are perfect ( i . e . the Modigliani - Miller Theorems hold ) . The Cat Nap Pet Stores capital structure

Assume capital markets are perfect

(

.

.

the Modigliani

-

Miller Theorems hold

) .

The Cat Nap

Pet Stores capital structure is currently comprised of

16

million dollars of debt and

19

million

dollars of equity. If the firm issues

3

million dollars in new debt, what will the value of the

company's equity be after the issuance of the new debt?

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