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Novell Electronics, whose value as an unlevered firm would be 10 million, has 1 million of debt outstanding. Use Millers tax model to calculate the
Novell Electronics, whose value as an unlevered firm would be 10 million, has 1 million of debt outstanding. Use Millers tax model to calculate the levered value of Novell Electronics under the following tax scenarios: (Corporate tax is 34%)
- The personal tax rate on equity income is 34%.
The personal tax rate on debt income is 34%.
- The personal tax rate on equity income is 0%.
The personal tax rate on debt income is 34%.
- The personal tax rate on equity income is 10%.
The personal tax rate on debt income is 34%.
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