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Assume an Unlevered Firm Changes Its Capital Structure to Include

question 33

Multiple Choice

Assume an unlevered firm changes its capital structure to include $1 million in permanent debt at a 7% interest rate.The tax rate is 35%.According to MM I with taxes,the value of the firm will increase by ____ due to this change in its capital structure.


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A British philosopher and political economist known for his contributions to liberalism, utilitarianism, and the freedom of speech.

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