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Sailor Corporation has a debt-to-value ratio of 10%. The firms revenues are $500,000 per year forever and its operating costs are $360,000 per year forever.
Sailor Corporation has a debt-to-value ratio of 10%. The firms revenues are $500,000 per year forever and its operating costs are $360,000 per year forever. The firms cost of debt is 10% and its cost of equity is 21%. The firm has 100,000 shares outstanding. Assume the corporate tax rate of 34%. Round the final answers to two decimal places.
a. What is the current value of the firm?
b. What is Sailors stock price?
c. What is the PV(DTS)?
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