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Question 6 Not yet answered Marked out of 10.00 Buller Butter Ltd expects to earn pre-tax operating income of $10.08 million each year going forward
Question 6 Not yet answered Marked out of 10.00 Buller Butter Ltd expects to earn pre-tax operating income of $10.08 million each year going forward in perpetuity. The firm has an unlevered cost of capital of 16.8% per annum and is expected to continue to pay corporate tax at a rate of 30.0% for the foreseeable future. Buller Butter Ltd also has $21.0 million of permanent debt outstanding that currently trades at par and on which it pays $1.4 million in interest. Flag question A) What would be the value of Buller Butter Ltd if it were all-equity financed? million (Round your answer to 3 decimal places) B) What is the value of Buller Butter Ltd given the current amount of debt? million (Round your answer to 3 decimal places) C) What can Buller Butter Ltd expect as after-tax income per year? million (Round your answer to 3 decimal places) D) What is the cost of equity for Buller Butter Ltd? % (Round your answer to 2 decimal places)
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