KoeDo Inc. currently has cost of capital of 8% when there is no debt, with tax rate is 33 percent with $10,000 of debt t

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answerhappygod
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KoeDo Inc. currently has cost of capital of 8% when there is no debt, with tax rate is 33 percent with $10,000 of debt t

Post by answerhappygod »

KoeDo Inc. currently has cost of capital of 8% when there is no
debt, with tax rate is 33 percent with $10,000 of debt that carries
a coupon rate of 5 percent, priced at $100. It's earnings before
interest and taxes is $58,700 . Assuming no bankruptcy cost, with
the current debt structure, under MM theory, value of the firm
should be closest to:
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