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Assume the corporate tax rate is 50 % . A firm has perpetual expected EBIT of $ 100 . The firm has no debt in its capital structure . Its cost of...
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1.

Assume the corporate tax rate is 50%. A firm has perpetual expected EBIT of $100. The firm has no debt in its capital structure.

Its cost of equity is 10%. What would be the value of the firm if it issued $400 in perpetual debt? A) $700 B) $800 C) $900 D) $1200 E) None of the above
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Subject: Business, Finance

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