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The current value of a firm is $99,746 and it is 100% equity financed. The firm is considering restructuring so that it is 34% debt
The current value of a firm is $99,746 and it is 100% equity financed. The firm is considering restructuring so that it is 34% debt financed. If the firm's corporate tax rate is 45%, the typical personal tax rate of an investor in the firm's stock is 20%, and the typical tax rate for an investor in the firm's debt is 15%, what will be the new value of the firm under the MM theory with corporate taxes but no possibility of bankruptcy.
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