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Tatum can borrow at 6.65 percent. The company currently has no debt and the cost of equity is 11.05 percent. The current value of the
Tatum can borrow at 6.65 percent. The company currently has no debt and the cost of equity is 11.05 percent. The current value of the firm is $620,000. The corporate tax rate is 25 percent. What will the value be if the company borrows $335,000 and uses the proceeds to repurchase shares? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
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