Question
Problem 16-16 M and M [LO2] Tool Manufacturing has an expected EBIT of $101,000 in perpetuity and a tax rate of 35 percent. The firm
Problem 16-16 M and M [LO2]
| Tool Manufacturing has an expected EBIT of $101,000 in perpetuity and a tax rate of 35 percent. The firm has $175,000 in outstanding debt at an interest rate of 8.7 percent, and its unlevered cost of capital is 15 percent. |
| What is the value of the firm according to M&M Proposition I with taxes? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) |
| Value of the firm
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Multinational Business Finance
Authors: David Eiteman, Arthur Stonehill, Michael Moffett
15th Global Edition
129227008X, 9781292270081
