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Firm L has debt with a market value of $200,000 and a yield of nine percent. The firm's equity has a market value of $300,000,
Firm L has debt with a market value of $200,000 and a yield of nine percent. The firm's equity has a market value of $300,000, its earnings are growing at a five percent rate, and its tax rate is 40 percent. A similar firm with no debt has a cost of equity of 12 percent. Under the MM extension with growth, what would Firm L's total value be if it had no debt
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