What will the value be if the firm borrows 140000 and uses, Financial Management

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What will the value be if the firm borrows 140000 and uses

The Piano Movers can borrow at 7.8 percent. The firm currently has no debt, and the cost of equity is 15 percent. The current value of the firm is $680,000. What will the value be if the firm borrows $140,000 and uses the proceeds to repurchase shares? The corporate tax rate is 35 percent.

$820,000

$540,000

$729,000

$571,000

$750,000

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Financial Management: What will the value be if the firm borrows 140000 and uses

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Financial Management: What will the value be if the firm borrows 140000 and uses

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