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You own all the equity of Space Babies Diaper Co. The company has no debt. The companys annual cash flow is $10,000, before interest and
You own all the equity of Space Babies Diaper Co. The company has no debt. The companys annual cash flow is $10,000, before interest and taxes. The corporate tax rate is 35%. You have the option to exchange part of your equity position for 6% bonds with a face value of $50,000. Should you do this? Why?
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