Morales publishings tax rate is 40 its beta is 110 and it


Morales Publishing’s tax rate is 40%, its beta is 1.10, and it uses no debt. However, the CFO is considering moving to a capital structure with 30% debt and 70% equity. If the risk-free rate is 5.0% and the market risk premium is 6.0%,if the company has free cash flow of $50m every year and the yield on the company's outstanding bonds is 7.75%, what is firm value with the new capital structure(30% debt and 70% equity)?

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Financial Management: Morales publishings tax rate is 40 its beta is 110 and it
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