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Tauntons is an all-equity firm that has 154,000 shares of stock outstanding. The CFO is considering borrowing $269,000 at 7A firm has a cost of debt of 5.6 percent and a cost of equity of 14.5 percent. The debt-equity ratio is 1.14. There are no ta

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Answer #1

$1,801,130 Value of the firm = 269000/23000*154000cost of capital market value weights Particulars weighted cost Equity capital 47% 14.50% 6.78% Debt 53% 5.60% 2.98% 9.76% Wei

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