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Consider a company with constant EBIT that does not plan to make any investments in the future, nor plans to change its NWC amount or
Consider a company with constant EBIT that does not plan to make any investments in the future, nor plans to change its NWC amount or the value of its plants. EBIT will be $ 1,000,000 in perpetuity. The unlevered cost of capital is 20 percent, the tax rate is 30 percent, and the current value of debt is $ 1,000,000. The levered value of the company is given by:
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$3,800,000
$4,000,000
$4,200,000
$4,400,000
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