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Question 5 - [ 10 points ] LMNOP faces cost of equity of 15% and after-tax cost of debt of 9%. The company receives perpetual

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Question 5 - [ 10 points ] LMNOP faces cost of equity of 15% and after-tax cost of debt of 9%. The company receives perpetual EBIT of $150 million and has a $65 million perpetual interest expenses. The firm is subject to a 35% tax rate. a. What is the market value of LMNOP in million dollars? b. What is the present value of all the annual tax shields the firm enjoys due to its $65 million perpetual debt

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