Question
Dupuis can borrow at 12.00 percent. Dupuis currently has no debt, and the cost of equity is 15 percent. The current value of the firm
| Dupuis can borrow at 12.00 percent. Dupuis currently has no debt, and the cost of equity is 15 percent. The current value of the firm is $676,000. The corporate tax rate is 38 percent. |
| Required: |
| What will the value be if Dupuis borrows $227,000 and uses the proceeds to repurchase shares? |
| Value of the firm | $ |
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Options Futures And Other Derivatives
Authors: John C. Hull
7th Edition
0136015867, 9780136015864
