What is the original value of the firm

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Question - The Lehigh Valley Road Running Company has no debt outstanding and its financial position is given by the following data:

Assets (book = market) $3,000,000

EBIT $500,000

Cost of Equity, rs 10%

Stock price, P0 $15

Shares outstanding, n0 200,000

Tax Rate, T (Federal-plus-state) 40%

What is the original value of the firm?

Reference no: EM131882525

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