Question
The Mandem Co., has a debt ratio of 33%. The firms required return on unlevered equity is 17%, and the pre-tax cost of debt is
The Mandem Co., has a debt ratio of 33%. The firms required return on unlevered equity is 17%, and the pre-tax cost of debt is 9%. Sales revenues are expected to be $32.5 million in perpetuity and variable costs are expected to be 55% of sales. The tax rate is 35%, and the company pays out all earnings as dividends at the end of each year.
What is the value of Mandem (firm value)?
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Human Resource Management
Authors: Robert L. Mathis, John H. Jackson
13th Edition
053845315X, 978-0538453158
