The company can borrow at 9 percent and the corporate tax


Malkin Corp. has no debt but can borrow at 6.5 percent. The firm’s WACC is currently 10 percent, and there is no corporate tax. a. What is the company’s cost of equity?

Calvert Corporation expects an EBIT of $21,750 every year forever. The company currently has no debt, and its cost of equity is 15.0 percent. The company can borrow at 9 percent and the corporate tax rate is 38. a. What is the current value of the company?

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Financial Management: The company can borrow at 9 percent and the corporate tax
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