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with Tax Deductible Deht is greater and taxes; the value of a firm with perpetual (tax decuctible) debi - Suppose a company was worth $3

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with Tax Deductible Deht is greater and taxes; the value of a firm with perpetual (tax decuctible) debi - 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 ata rate of 22%, what is the value of the firm after its debt issuance

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