To illustrate that financing has no impact on firm value if there are no taxes (i.e. financing affects firm value purely because the interest payments generate tax-savings), and to further illustrate the equivalence of various valuation methods. Assume the the firm has$ 100,000 of debt @ 10% and the tax rate is zero.
Assume the the firm has $ 200,000 of debt @10% and the tax rate is zero.
Find the firm value using
j) APV method
$__________.
k) FTE method
$__________.
l) WACC method
$__________.