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Suppose Scotts borrows $500 million by issuing 10-year bonds at a yield of 4%. It plans to repay the bonds in 10 years without refinancing
Suppose Scotts borrows $500 million by issuing 10-year bonds at a yield of 4%. It plans to repay the bonds in 10 years without refinancing them with new debt. Scotts tax rate will remain 35% throughout this period. By how much does the bond issuance increase the value of Scotts?
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