Question
Kline Construction is an all-equity firm that has projected perpetual EBIT of $368,000. The current cost of equity is 13.5 percent and the tax rate
Kline Construction is an all-equity firm that has projected perpetual EBIT of $368,000. The current cost of equity is 13.5 percent and the tax rate is 21 percent. The company is in the process of issuing $984,000 worth of perpetual bonds with an annual coupon rate of 5.7 percent at par. What is the value of the levered firm?Kline Construction is an all-equity firm that has projected perpetual EBIT of $368,000. The current cost of equity is 13.5 percent and the tax rate is 21 percent. The company is in the process of issuing $984,000 worth of perpetual bonds with an annual coupon rate of 5.7 percent at par. What is the value of the levered firm?
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The 30 Minute Stock Trader
Authors: Laurens Bensdorp
1st Edition
1619615738, 978-1619615731
