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Laminar Associates is a manufacturing firm with no debt outstanding. It is considering a 5-year loan of $50 million at 8 percent and using the

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Laminar Associates is a manufacturing firm with no debt outstanding. It is considering a 5-year loan of $50 million at 8 percent and using the proceeds to buy back shares. Its equity market value is currently $100 million, and its profits are taxed at 36 percent. What is the total firm's value after the capital restructuring, if the interest rate increases to 9 percent immediately after the debt is issued? Laminar Associates is a manufacturing firm with no debt outstanding. It is considering a 5-year loan of $50 million at 8 percent and using the proceeds to buy back shares. Its equity market value is currently $100 million, and its profits are taxed at 36 percent. What is the total firm's value after the capital restructuring, if the interest rate increases to 9 percent immediately after the debt is issued

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