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Dupuis can borrow at 10.00 percent. Dupuis currently has no debt, and the cost of equity is 16 percent. The current value of the firm

Dupuis can borrow at 10.00 percent. Dupuis currently has no debt, and the cost of equity is 16 percent. The current value of the firm is $652,000. The corporate tax rate is 34 percent.

Required:

What will the value be if Dupuis borrows $219,000 and uses the proceeds to repurchase shares?

Value of the firm

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