The effective tax rate is 25 what is the firm value after


Now assume you are in a perfect market with only corporate taxes added. CDE Corp. is all equity financed with 5000 shares outstanding worth $9 each. They are planning on issuing $10,000 of new perpetual debt at the 8% market rate of interest. The effective tax rate is 25%. What is the firm value after they make the debt for equity exchange?

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Finance Basics: The effective tax rate is 25 what is the firm value after
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