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XYZ company expects EBIT of $ 80000 every year forever and its tax rate is 35%. The firm has no debt and its cost of
XYZ company expects EBIT of $ 80000 every year forever and its tax rate is 35%. The firm has no debt and its cost of equity is 10%. The firm can borrow at 6%.
- What is the value of the firm?
- What will the value be if the company borrows $208,000 and uses the proceeds to repurchase shares?
- What is the cost of equity after recapitalization?
- What is the WAAC after recapitalization?
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Introductory Course On Financial Mathematics
Authors: M V Tretyakov
1st Edition
1908977388, 978-1908977380
