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eBook Check My Work (10 remaining) Referring to table below, calculate the market value of firm L (without a corporate income tax) if the
eBook Check My Work (10 remaining) Referring to table below, calculate the market value of firm L (without a corporate income tax) if the equity amount in its capital structure decreases to $5,000 and the debt amount increases to $5,000. At this capital structure, the cost of equity is 11 percent. Round your answer to the nearest dollar. $ Icon Key Net operating income (EBIT) Less: Interest payments to debt holders, I Income available to stockholders (dividends), D Total income available to security holders, I + D Required rate of return on debt, kd Market value of debt, B = I/kd Required rate of return on equity,ke Market value of equity, E = D/ke Market value of firm, E + B Firm U $ 1,000 Firm L $ 1,000 180 $ 1,000 $ 820 $ 1,000 $ 1,000 9% 10% $ 2,000 10.25% $10,000 $10,000 $ 8,000 $10,000 Check My Work (10 remaining)
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