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The corporate tax rate is 30 assume that personal taxes and

The beta of the equity of ABC Company is 1.67 and ABC has a debt-to-equity ratio of 0.67 calculated at market values. The debt is risk-free and perpetual. ABC generates annual EBIT of $100 and has 100 shares of common stock outstanding. The expected return on the market portfolio is 15% and the risk-free interest rate is 5%. The corporate tax rate is 30%. Assume that personal taxes and bankruptcy costs are not relevant.

1) Compute the current market value of ABC Company.

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