Question
Kline Construction is an all-equity firm that has projected perpetual EBIT of $292,000. The current cost of equity is 11.6 percent and the tax rate
Kline Construction is an all-equity firm that has projected perpetual EBIT of $292,000. The current cost of equity is 11.6 percent and the tax rate is 21 percent. The company is in the process of issuing $908,000 worth of perpetual bonds with an annual coupon rate of 5.8 percent at par. What is the value of the levered firm?
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
13th Edition
1337395080, 9781337395083
