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  • 24-11-2022
  • Business
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companies u and l are identical in every respect except that u is unlevered while l has $8 million of 7% bonds outstanding. assume that: (1) all of the mm assumptions are met. (2) both firms are subject to a 40% federal-plus-state corporate tax rate. (3) ebit is $4 million. (4) the unlevered cost of equity is 12%.

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