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-VL=VU+tD - Suppose a company was worth $3 million prior to issuing debt. It then issues $500,000 of (perpetual) tax deductible debt with 5% interest

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-VL=VU+tD - Suppose a company was worth $3 million prior to issuing debt. It then issues $500,000 of (perpetual) tax deductible debt with 5% interest (which it uses to repurchase some existing shares). If it pays corporate taxes at a rate of 22%, what is the value of the firm after its debt issuance

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