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Suppose the marginal corporate tax rate is 25 percent. Further, let's suppose the firm has no debt in its capital structure and it is currently

Suppose the marginal corporate tax rate is 25 percent. Further, let's suppose the firm has no debt in its capital structure and it is currently valued at 110 million. Interest rate on debt is 8 percent .What would be the value of the firm if it issued 60 million in perpetual debt and repurchased the same amount of equity?

Options:

A)150

B)125

C)65.5

D)100

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