Question
Hunter Corporation expects an EBIT of $48,300every year forever.Te company currently has no debt and its cost of equity is 11.83%.The tax rate is 31%.Suppose
Hunter Corporation expects an EBIT of $48,300every year forever.Te company currently has no debt and its cost of equity is 11.83%.The tax rate is 31%.Suppose the company can borrow at 11.9%.
What will be the value of the company be if it takes on debt equal to 51% of its unleveredvalue?
NOTE: Enter the number rounding to four DECIMALS. If your decimal answer is 0.034576, your answer must be 0.0346. DO NOT USE the % sign
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
