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Business, 09.12.2021 03:50 kh3791

King Sailor Inc. just issued $1,538,421 of perpetual 6.75% debt and used the proceeds to repurchase stock. The company expects to generate $871,540 of earnings before interest and taxes in perpetuity. The company distributes all its earnings at the end of each year. The firm's unlevered cost of capital is 11.83% and the corporate tax rate is 21%. What is the value of the firm's equity after the debt has been issued and the stocks repurchased?

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King Sailor Inc. just issued $1,538,421 of perpetual 6.75% debt and used the proceeds to repurchase...

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