An unlevered firm has a value of $650 million. An otherwise identical but levered firm has...
An unlevered firm has a value of $650 million. An otherwise identical but levered firm has $125 million in debt. Under the MM zero-tax model, what is the value of the levered firm? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000.
$ ? million
Homework Answers
Value of levered firm= 650 million + 125 million *0= $650 million
The value of unlevered and levered firm in an MM zero tax model will remain same.
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An unlevered firm has a value of $650 million. An otherwise
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