The corporate tax rate is 30 percentwhat will the value be


Question

Wolfgang can borrow at 11 percent. The company currently has no debt, and the cost of equity is 12 percent. The current value of the firm is $664,000.

The corporate tax rate is 30 percent.What will the value be if the company borrows $223,000 and uses the proceeds to repurchase shares?

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Financial Management: The corporate tax rate is 30 percentwhat will the value be
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