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Use below information for following two questions (Q24-Q25), AAA Corporation and BBB Corporation are identical in every way except their capital structures. AAA Corporation, an

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Use below information for following two questions (Q24-Q25), AAA Corporation and BBB Corporation are identical in every way except their capital structures. AAA Corporation, an all-equity firm, has 35 million shares of stock outstanding, currently worth $25 per share. BBB Corporation uses leverage in its capital structure. The market value of BBB's debt is $250mil, and its cost of debt is 3.5 percent. Each firm is expected to have earnings before interest and tax of S17Smil. in perpetuity. Assume that every investor can borrow at 3.5 percent per year. Corporate tax rate is 35% and personal tax rate on bond interest income is 30%. Q25. If the personal tax rate on bond interest income increases to 35% (from 30%), what is the new value of BBB corporations

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