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Question 29-Consider two firms, With and without that have identical assets that generate identical cash flows. Without is an all-equity firm, with 1 million shares

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Question 29-Consider two firms, With and without that have identical assets that generate identical cash flows. Without is an all-equity firm, with 1 million shares outstanding that trade for a price of $24 per share. With has 2 million shares outstanding and $12 million in debt at an interest rate of 5%. According to MM Proposition 1, what is the stock price for With? The value of Without is and the value of With so the stock price for With is 1,000,000 x $24=$24,000,000 1,000,000/$24=$41,667 is the same as the value of Without according to MM1 cannot be calculated as not enough information has been given $6 unknown $12 h

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