Question
Dupuis can borrow at 9.25 percent. Dupuis currently has no debt, and the cost of equity is 14.5 percent. The current value of the firm
| Dupuis can borrow at 9.25 percent. Dupuis currently has no debt, and the cost of equity is 14.5 percent. The current value of the firm is $643,000. The corporate tax rate is 40 percent. |
| Required: |
| What will the value be if Dupuis borrows $216,000 and uses the proceeds to repurchase shares? |
| Value of the firm = $ |
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The Geography Of Finance
Authors: Gordon L. Clark, Darius Wójcik
1st Edition
0199213364, 978-0199213368
