Question
I NEED ABSOLUTE HELP ABOUT THAT According to the information for two firms (levered and unlevered firms) given below, compute the value of the levered
I NEED ABSOLUTE HELP ABOUT THAT
According to the information for two firms (levered and unlevered firms) given below, compute the value of the levered firm including the values of the tax-shield benefits of the debt and bankruptcy-agency costs. Assuming zero growth and 100% dividend payout, permanent debt, so treated as a perpetuity.
Debt amount for levered firm : $50.000
NOI for each firm : $40.000
Interest rate for the debt : 10%
Stock market return : 12%
Tax rate for each firm : 20%
Treasury bill rate : 5%
Present value for bankruptcy-agency cost : $38.000
Beta () coefficient for unlevered firm : 0.9
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