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Southern Timber Company expects to earn $ 8 million in EBIT in the coming year. After that, its EBIT is expected to grow by 4
Southern Timber Company expects to earn $ million in EBIT in the coming year. After that, its EBIT is expected to grow by per year in perpetuity. Southern Timber is currently an unlevered firm with a cost of capital of The corporate tax rate is A panel of professional financial experts indicates that the company can enjoy a tax shield benefit of $ million in firm value if the company changes its capital structure by allowing a certain amount of debt. What would be the value of Southern Timber Company if it decides to undertake the capital structure suggested by these financial experts?
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