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Once Bitten Corp. uses no debt (it is unleveraged). The weighted average cost of capital is 8.4 percent. If the current market value of the
Once Bitten Corp. uses no debt (it is "unleveraged"). The weighted average cost of capital is 8.4 percent. If the current market value of the equity is $25 million and there are no taxes, what is EBIT? Note: Use the "M&M proposition I formula with taxes" and enter a 0 for the tax rate and a $0 for debt. Then solve for the EBIT. Use the WACC here as a measure of the unleveraged cost of capital RU. (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g. 1,500,000, not 1.5) |
EBIT | $ |
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