Homework Answers
Value of Unlevered Firm = $900 million
Value of Debt = $140 million
Tax Rate = 35%
Value of Unlevered Firm = Value of Unlevered Firm + Value of
Debt * Tax Rate
Value of Unlevered Firm = $900 million + $140 million * 0.35
Value of Unlevered Firm = $900 million + $49 million
Value of Unlevered Firm = $949 million
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