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Python has 50,000 shares and 1,000 bonds outstanding. Shares are valued at $20 each, bonds are selling at $1,500 each. The corporate tax rate is

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Python has 50,000 shares and 1,000 bonds outstanding. Shares are valued at $20 each, bonds are selling at $1,500 each. The corporate tax rate is 25%. Assuming that the debt is perpetual and constant, what is the present value of the tax shield on debt? What is the unlevered value of the company? a. $0; $2,125,000 b. $375,000; $2,500,000 c. $1,000,000; $1,500,000 d. $375,000; $2,125,00 e. $2,125,000; $2,500,000 Safirah is a company with no debt at all. The current cost of equity is 8% and the tax rate is 25%. It is now considering to raise debt to reach a WACC of 6.5%. What should be its debt to equity ratio? (Assuming the Mogliani-Miller Model with taxes) Do the calculations with 2 decimal points. a. 0.5 b. 5 C. None of the others d. 3 Oe

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