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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
MM and Taxes Cede & Co. expects its EBIT to be $57,500 every year forever. The firm can borrow at 8 percent. Cede currently has no debt, and its cost of equity is 15 percent. If the tax rate is 35 percent, what is the value of the firm? What will the value be if the company borrows $120,000 and uses the proceeds to repurchase shares?
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