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Question 5 20 points Saved As a financial analyst at Merrill Lynch, you are analyzing the impact of debt on the value of the firm.

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Question 5 20 points Saved As a financial analyst at Merrill Lynch, you are analyzing the impact of debt on the value of the firm. Suppose Quantum Electronics, Inc has a mixed debt and equity in its capital structure. The company is currently valued at $500 million. The corporate tax rate of the company is 28%. As a financial analyst at Citibank, you want to answers the following questions: a. What would be the value of the firm if it issued $200 million in perpetual debt and repurchased the equity? b. What would be the value of the firm if it issued a $200 million, one-year loan at 10%? c. What would be the value of the firm if it issued a 20-year loan of $200 million at 10%? Please choose all correct answers. Please also note that each incorrect answer will reduce the score by 10%. 01. The value of the firm is $500.09 million if it issued a $200 million, one-year loan at 10% 2 The value of the firm is $514.09 million if it issued a $200 million, 20-year loan at 10% 3. The value of the fimm would be $S60 million if it issued $200 million in perpetual debt and repurchased the equity The value of the firm would be $556 million if it issued $200 million in perpetual debt and repurchased the equity 5. The value of the firm is $510.09 million if it issued a $200 million, one-year loan at 10% 06. The value of the fim is $544.09 million if it issued a $200 million, 20-year loan at 10% 7. The value of the fimm would be $558 million if it issued $200 million in perpetual debt and repurchased the equity 8. The value of the firm is 547.68 if it issued a 20-year loan of $200 million at 10%. 9. The value of the firm is $537.09 million if it issued a $200 million, 20-year loan at 10% 10. The value of the firm is $515.09 million if it issued a $200 million, one-year loan at 10% 11. The value of the firm is $505.09 million if it issued a $200 million, one-year loan at 10% 12. The value of the firm would be $562 million if it issued $200 million in perpetual debt and repurchased the equity

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