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Assume the marginal corporate tax rate is 30 percent. When the firm has no debt in its capital structure, it is valued at $100 million.

Assume the marginal corporate tax rate is 30 percent. When the firm has no debt in its capital structure, it is valued at $100 million. What would be the value of the firm if it issued $50 million in perpetual debt and repurchased the same amount of equity?

a. $100 million

b. $65 million

c. $150 million

d. $115 million

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