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Uptown Interior Designs is an all-equity firm that has 40,000 shares of stock outstanding. The company has decided to borrow $7400 permanent debt to buy

Uptown Interior Designs is an all-equity firm that has 40,000 shares of stock outstanding. The company has decided to borrow $7400 permanent debt to buy out the 210 shares of a deceased stockholder. Assume the corporate tax rate is 21% and the market is efficient.

What is the total value of this firm after the recapitalization? What is the total value of this firm before announcing the recapitalization plan?

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