Question
EBIT = $400,000, T = 40%, g = 4%, rsU= 15% , rd= 5%, Debt = $1.2M. Required reinvestment in net operating assets = 10%
EBIT = $400,000, T = 40%, g = 4%, rsU= 15% , rd= 5%, Debt = $1.2M.
Required reinvestment in net operating assets = 10% of EBIT
Based on the above information, what is the value of theleveredcompany, VL, if EBIT grows at 4% according to the extension of MM by including the growth?
a.$2.04M
b.$2.38M
c.$2.27M
d.$1.83M
e.$1.58M
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
13th edition
978-1285027371, 128502737X, 978-1133541141
