Dylan expects an EBIT of RM10,000 every year forever. Dylan can borrow at 7 percent. Suppose Dylan currently has no debt

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Dylan expects an EBIT of RM10,000 every year forever. Dylan can borrow at 7 percent. Suppose Dylan currently has no debt

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Dylan Expects An Ebit Of Rm10 000 Every Year Forever Dylan Can Borrow At 7 Percent Suppose Dylan Currently Has No Debt 1
Dylan Expects An Ebit Of Rm10 000 Every Year Forever Dylan Can Borrow At 7 Percent Suppose Dylan Currently Has No Debt 1 (11.36 KiB) Viewed 41 times
Dylan expects an EBIT of RM10,000 every year forever. Dylan can borrow at 7 percent. Suppose Dylan currently has no debt, and its cost of equity is 12 percent. If the corporate tax is 35 percent, what is the value ofthe firm? What will the value be if Dylan borrows at RM33,000 and uses the proceeds to purchase stock? (5 marks)
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