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oston Casinos Inc. has an EBIT of $46,000 at the end of year 2013. It has...

oston Casinos Inc. has an EBIT of $46,000 at the end of year 2013. It has no debt outstanding, the corporate tax rate is 34%, and its cost of capital is 15%. What will the value of the firm be if Boston Casinos issues $75,000 in debt?

After issuing $75,000 of debt at 10% interest rate, what is the cost of equity for Boston Casinos Inc. and what is the weighted average cost of capital (WACC)?



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Formula sheet

jeff jeffy answered 2 years ago
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