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Wolfgang can borrow at 12.5 percent. The company currently has no debt, and the cost of equity is 16 percent. The current val
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Answer #1
Formula to calculate value of levered firm
Value of levered firm = Value of unlevered firm + Tax rate*Amount borrowed
Value of levered firm = 682,000 + (0.35*229000)
Value of levered firm $762,150
The value of levered firm would be $762,150
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