Question
Miller's, a zero growth firm, has an expected EBIT of $205,000 and a corporate tax rate of 40%. Miller's uses $365,000 of 9% debt and
Miller's, a zero growth firm, has an expected EBIT of $205,000 and a corporate tax rate of 40%. Miller's uses $365,000 of 9% debt and the cost of equity to an unlevered firm in the same risk is 17%.What is the firm's cost of equity according with corporate taxes?
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Entrepreneurial Finance And Accounting For High-Tech Companies
Authors: Frank J Fabozzi
1st Edition
0262336901, 9780262336901
