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Global Industries, Inc. is considering a change in its capital structure. The firm's internal financial analysts have partially completed the following table showing the impacts

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Global Industries, Inc. is considering a change in its capital structure. The firm's internal financial analysts have partially completed the following table showing the impacts on the firm of three different levels of financial leverage. The risk-free rate of return is 4% while the market average rate of return in 10%. The firm's Free Cash Flow is $80.0 million. The firm faces as marginal tax rate of 40%. The firm has no non-operating assets and growth rate of zero. % Financed With Debt After-tax cost of Debt Estimated beta WACC Cost of Equity Value of Firin (S millions) W (1.0) B 0.00% 3.10% 1.10 15.00% 3.8096 30.00% 4.40% The value of Global Industries if the firm chooses a capital structure described by a total debt ratio of 30% would be which of the following? Note that this table gives the AFTER tax cost of debt. Note also that you may not need to complete the entire table to answer the question. Select one: a. $532 b. $ 673 @c. $ 717 d. $ 806 e. None of the above

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