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Company ABC currently has no debt and has an unlevered firm value of $32.5 million. Assuming the tax rate is 35% and all MM assumptions

Company ABC currently has no debt and has an unlevered firm value of $32.5 million. Assuming the tax rate is 35% and all MM assumptions are met, what will be the value of the company if it borrows $20 million and uses the proceeds to repurchase shares?

a.$32.50m

b.$39.50m

c.$57.00m

d.$70.00m

e.$41.25m

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