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The Full Value of the LEVERED firm can be best expressed by... Value of the UNLEVERED Firm + [rd(1 - T)] + Financial Distress Value
The Full Value of the LEVERED firm can be best expressed by...
Value of the UNLEVERED Firm + [rd(1 - T)] + Financial Distress
Value of the UNLEVERED Firm + rd(Debt outstanding)(Tax rate) + PV of the Cost of Financial Distress (bankruptcy)
rd
Value of the UNLEVERED FIRM + PV of Tax Shield on Debt
PV of the LEVERED FIRM + Tax Shield on Debt
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
3rd Edition
0471375942, 978-0471375944
