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Author Question: In a perfect world of no taxes, what happens if the weighted average cost of capital (WACC) is ... (Read 124 times)

am7272

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on: Aug 7, 2023

Question 1

If the value of a levered firm is $7 million, what is the value of the same firm with all-equity financing?

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$7 million


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$6 million


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$8 million


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$10 million



Question 2

In a perfect world of no taxes, what happens if the weighted average cost of capital (WACC) is unaffected by the capital structure?

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SML is upward sloping.


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MM Proposition II holds.


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MM Proposition I holds.


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SML is downward sloping.

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Marked as best answer by am7272 on Aug 7, 2023

dadgoere765

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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am7272

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

diana chang

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Reply 3 on: Yesterday
Wow, this really help

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