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Like for any other firms, Mega Profit Corporations corporate tax rate is 32%. Currently, its unlevered cost of capital is 8%. Each year, Mega Profit
Like for any other firms, Mega Profit Corporations corporate tax rate is 32%. Currently, its unlevered cost of capital is 8%. Each year, Mega Profit Corporation expects free cash flows of $40 million. However, the firm also has outstanding debt of $99.25 million.
Actually, it expects to maintain this level of debt permanently.
- What is the value of Mega Profit Corporation without leverage?
- What is the value of Mega Profit Corporation with leverage?
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