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Business, 05.05.2020 19:36 david6835

Tatum can borrow at 6.85 percent. The company currently has no debt and the cost of equity is 11.25 percent. The current value of the firm is $640,000. The corporate tax rate is 24 percent. What will the value be if the company borrows $355,000 and uses the proceeds to repurchase shares? (Do not round intermediate calculations and round your answer to the nearest whole number, e. g., 32.)

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Tatum can borrow at 6.85 percent. The company currently has no debt and the cost of equity is 11.25...
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