Project #9171 - Finance, Capital Budgeting, Market Value of Firm

Consider a world where the M&M Corporate Taxes Capital Structure theory is true, then answer the following question.  An all-equity firm currently has a market value of $640.85.  The firm decides to issue debt in order to repurchases $228.20 in equity.  No other changes are made to the firm.  The debt will will be issued at par with an interest rate of 4.4%.  The firm is in the 38% tax bracket.  What is the new value of the firm.  

Subject Business
Due By (Pacific Time) 07/16/2013 06:00 pm
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