Determining value of firm

Reference no: EM1367902

A company has a EBIT to be $100,000 every year forever. The company can borrow at 5%, has no debt and a cost of equity of 15%. If the tax rate is 25 %, what is the value of the firm? What will the value be if the company borrows $130,000 and uses the proceeds to repurchase shares?

Reference no: EM1367902

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