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Halgate Group is entirely equity-financed. It expects to have an annual income of $15,809 in perpetuity. The expected annual return to equity is 11%. The

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Halgate Group is entirely equity-financed. It expects to have an annual income of $15,809 in perpetuity. The expected annual return to equity is 11%. The company plans to raise debts to repurchase 37% of its outstanding stocks. To raise the money, Halgate Group will need to pay an annual interest of 7%. The corporate tax rate is 21%. Suppose there are no bankruptcy costs. Due to the interest tax shields, the value of the company will increase by $ after the restructuring

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