Janetta Corp. has an EBIT rate of 975,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 14

# Janetta Corp. has an EBIT rate of 975,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 14

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Janetta Corp
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Excerpt from file: Solution 1 : EBIT Unlevered cost of equity Tax rate Market value of perpetual bond a 975,000 14% 35% 1.9 Value of the company Using M&M proposition I with taxes, the value of a levered firm is: VL EBIT(1-t)/Ro)tB VL 975000*()/)*(19,00,000) Value of the firm b CFO of the company may be correct,

Filename: janetta-corp-has-an-ebit-rate-of-975000-per-year-that-is-expected-to-continue-in-perpetuity-the-unlevered-cost-of-equity-for-the-company-is-14-56.xlsx

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