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PATO X has debt outstanding with a face value of $6 million and a market value of $5 million. The value of the firm if

PATO X has debt outstanding with a face value of $6 million and a market value of $5 million. The value of the firm if it were entirely financed by equity would be $15.7 million. Current market value of Usee Inc is $15.5 million. The corporate tax rate is 40%. What is the decrease in the value of the company due to expected financial distress costs?

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