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Suppose the total value of the firm is 150 million. The firm's debt-equity ratio is 0.5, and the interest rate (before tax) on its debt

Suppose the total value of the firm is 150 million. The firm's debt-equity ratio is 0.5, and the interest rate (before tax) on its debt is 4 percent, while its cost of equity is 12 percent. The effective corporate tax rate is 25 percent. By assuming

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