Uses the proceeds to repurchase shares

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Dupuis can borrow at 9.50 percent. Dupuis currently has no debt, and the cost of equity is 15 percent. The current value of the firm is $646,000. The corporate tax rate is 30 percent.

Required:

What will the value be if Dupuis borrows $217,000 and uses the proceeds to repurchase shares?

Value of the firm $

Reference no: EM13941752

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