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Problem 13-12 M&M and Taxes (LO 2] Tatum can borrow at 7.15 percent. The company currently has no debt and the cost of equity is
Problem 13-12 M&M and Taxes (LO 2] Tatum can borrow at 7.15 percent. The company currently has no debt and the cost of equity is 11.55 percent. The current value of the firm is $670,000. The corporate tax rate is 25 percent. What will the value be if the company borrows $385,000 and uses the proceeds to repurchase shares? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Value of the firm
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