Uses the proceeds to repurchase shares-value of the firm

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Reference no: EM131507143

Wolfgang can borrow at 11 percent. The company currently has no debt, and the cost of equity is 12 percent. The current value of the firm is $664,000. The corporate tax rate is 30 percent. What will the value be if the company borrows $223,000 and uses the proceeds to repurchase shares?

Value of the firm?

Reference no: EM131507143

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