Question
Dupuis can borrow at 9 percent. Dupuis currently has no debt, and the cost of equity is 15 percent. The current value of the firm
| Dupuis can borrow at 9 percent. Dupuis currently has no debt, and the cost of equity is 15 percent. The current value of the firm is $735,000. The corporate tax rate is 35 percent. |
| Required: |
| What will the value be if Dupuis borrows $220,000 and uses the proceeds to repurchase shares? |
| Value of the firm | $ |
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Introduction To Personal Finance Beginning Your Financial Journey
Authors: Lance Palmer, John E. Grable
2nd Edition
1119797063, 978-1119797067
