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The Miller Model // help! Sumy Co. and Markus Co, are identical in every respect except that Sunny is unfevered and Markus has $10.2 million
The Miller Model // help!
Sumy Co. and Markus Co, are identical in every respect except that Sunny is unfevered and Markus has $10.2 million of 5% bonds outstanding. Ascume all of the following: 1. All of Modiglitani and Miller's assumptions are met. 2. Both firms are subject to a 36% corporate tax rate. 3. EEIT is $4.0 million for both firmis. 4. Investers in both firms face a tax rate (Tit) of 26 . on debt income and a tax rate (T.) of 120 on stock income. 5. The rate of return before personal taxes (r,v) is 10%. Use Miller's model to fall in the table for Sunny Co. and Markus Co Step by Step Solution
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