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Blues Industries has an EBIT of $12 million per year forecast in perpetuity. Blues cost of equity is 15% and its tax rate is 28%.

Blues Industries has an EBIT of $12 million per year forecast in perpetuity. Blues cost of equity is 15% and its tax rate is 28%. If Blues Industries borrows $30 million, what will be the value of the firm?

Answers:

$66.0 million

$30.8 million

$76.4 million

$80.0 million

$57.6 million

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