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MM Inc. has 10 million shares outstanding with price 16.50. It takes a one-year loan for 100 million at 6% interest. Its shares then increase

MM Inc. has 10 million shares outstanding with price 16.50. It takes a one-year loan for 100 million at 6% interest. Its shares then increase in price to 16.60. The corporate tax rate is 25%.

Calculate the markets estimate of the value of financial distress.

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