Neal enterprises has no debt its current total value is 76


Neal Enterprises has no debt. Its current total value is $76 million. Assume debt proceeds are used to repurchase equity. Requirement 1: Ignoring taxes, what will the company’s value be if it sells $35 million in debt? Requirement 2: Suppose now that the company’s tax rate is 38 percent. What will its overall value be if it sells $35 million in debt?

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Financial Management: Neal enterprises has no debt its current total value is 76
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