Question
Lazare Corporation exceeds an EBIT pf $29,550 every year forever. Laxare currently has no debt, and its cost of equity is 11%. The firm can
Lazare Corporation exceeds an EBIT pf $29,550 every year forever. Laxare currently has no debt, and its cost of equity is 11%. The firm can borrow at 7%. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response)
If the corporate tax rate is 35%, what is the value of the firm?
What will the value be if the company converts to 50% debt?
What will the value be if the company coverts to 100% debt?
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The Value Investor's Handbook
Authors: Andrew P.C.
1st Edition
1098810449, 978-1098810443
