Business, 05.11.2020 18:50 praptibaral70
The Aggie Company has EBIT of $50,000 and market value debt of $100,000 outstanding with a 9% coupon rate. The cost of equity for an all equity firm would be 14%. Aggie has a 35% corporate tax rate. Investors face a 20% tax rate on debt receipts and a 15% rate on equity. Determine the value of Aggie.
A) $120,000
B) $162,948
C) $258,537
D) $263,080
E) $332,143
Answers: 1
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The Aggie Company has EBIT of $50,000 and market value debt of $100,000 outstanding with a 9% coupon...
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