Business
Business, 14.12.2019 01:31, 2003loganreed

Suppose a firm expects it’s ebit to be 105,000 per year forever. assume the firm can borrow at 6.75% ad has a tax rate of 32%. if the firm has no debt and a cost of equity of 10.25%, what is the value of the firm? ($696,585) now suppose the firm borrows $120,000 and uses the proceeds to repurchase shares. now what is the value of the firm?

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Suppose a firm expects it’s ebit to be 105,000 per year forever. assume the firm can borrow at 6.75%...

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