Question
Eccles Inc., a zero growth firm, has an expected EBIT of $200,000 and a corporate tax rate of 30%. Eccles uses $500,000 of 12.0% debt,
Eccles Inc., a zero growth firm, has an expected EBIT of $200,000 and a corporate tax rate of 30%. Eccles uses $500,000 of 12.0% debt, and the cost of equity to an unlevered firm in the same risk class is 16.0%.
What is the value of the firm according to MM with corporate taxes?
$
What is the firm's cost of equity according to MM with corporate taxes?
%. Round your answer to two decimal places.
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Handbook Of Blockchain Digital Finance And Inclusion
Authors: David Lee, Robert H. Deng
1st Edition
012812282X, 978-0128122822
