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Quillpen Company is unlevered and has a value of $40 billion. An otherwise identical but levered firm finances 20% of its capital structure with debt.
Quillpen Company is unlevered and has a value of $40 billion. An otherwise identical but levered firm finances 20% of its capital structure with debt. Under the MM zero-tax model, what is the value of the levered firm? Enter your answer in billions. For example, an answer of $1 billion should be entered as 1, not 1,000,000,000. Round your answer to the nearest whole number.
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