Question
OConnell & Co. expects its EBIT to be $98,000 every year forever. The firm can borrow at 6 percent. OConnell currently has no debt, and
| OConnell & Co. expects its EBIT to be $98,000 every year forever. The firm can borrow at 6 percent. OConnell currently has no debt, and its cost of equity is 12 percent. |
| If the tax rate is 35 percent, what is the value of the firm? What will the value be if the company borrows $140,000 and uses the proceeds to repurchase shares? (Round your answer to 2 decimal places. (e.g., 32.16))
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Financial Statements A Step By Step Guide To Understanding And Creating Financial Reports
Authors: Thomas Ittelson
1st Edition
1632652072, 978-1632652072
