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The current value of a firm is $674,572 and it is 100% equity financed. The firm is considering restructuring so that it is 13% debt
The current value of a firm is $674,572 and it is 100% equity financed. The firm is considering restructuring so that it is 13% debt financed. If the firm's corporate tax rate is 20%, the typical personal tax rate of an investor in the firm's stock is 15%, and the typical tax rate for an investor in the firm's debt is 25%, what will be the new value of the firm under the MM theory with corporate taxes but no possibility of bankruptcy? Round the answer to two decimals.
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