Question
Cage Co. currently uses no debt. In other words, it is an all-equity rm. The current market value of the company is $50 million. The
Cage Co. currently uses no debt. In other words, it is an all-equity rm. The current market value of the company is $50 million. The corporate tax rate is 40%. What is the new value of the company if Cage converts to debt-equity ratio of 1? What if the debt-equity ratio is 2?
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Financial Management In The Sport Industry
Authors: Matthew T. Brown, Daniel A. Rascher, Mark S. Nagel, Chad D. McEvoy
3rd Edition
0367321211, 978-0367321215
