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The question is asking for the MARKET VALUE of the firm's CAPITAL ASSETS The firm faces the statutory 21% flat tax rate. There is no
The question is asking for the MARKET VALUE of the firm's CAPITAL ASSETS
The firm faces the statutory 21% flat tax rate. There is no debt in the current liabilities. The firm has 7,506 shares outstanding, which have a current market price of $45.32 per share. You wish to determine the market-value of the firm's capital assets. Assume that the market values of the current assets, current liabilities and long-term debt are equal to their book-value. Also, assume that the nondebt long-term liabilities have no market value. Remember to consider the value of the tax shield based on the assumptions of the 1963 Modigliani and Miller relationship. What is the market-value of the firm's capital assets? (Show your answer rounded to the nearest dollar, e.g. 459267)Step by Step Solution
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