Question
Tool Manufacturing has an expected EBIT of $85,000 in perpetuity and a tax rate of 35 percent. The firm has $130,000 in outstanding debt at
| Tool Manufacturing has an expected EBIT of $85,000 in perpetuity and a tax rate of 35 percent. The firm has $130,000 in outstanding debt at an interest rate of 7.5 percent, and its unlevered cost of capital is 13 percent. |
| What is the value of the firm according to M&M Proposition I with taxes? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) |
| Value of the firm | $ |
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Budgets And Financial Management In Higher Education
Authors: Margaret J. Barr, George S. McClellan
3rd Edition
1119287731, 9781119287735
