Three Piggies Enterprises has no debt. Its current total value
is $72 million. Assume debt proceeds are used to repurchase
equity.
Ignoring taxes, what will the company’s value be if it sells $33
million in debt? (Do not round intermediate calculations
and enter your answer in dollars, not millions of dollars, e.g.,
1,234,567. Round your answer to the nearest whole number, e.g.,
32.)
Value of the firm
$
Suppose now that the company’s tax rate is 32 percent. What will
its overall value be if it sells $33 million in debt? (Do
not round intermediate calculations and enter your answer in
dollars, not millions of dollars, e.g., 1,234,567. Round your
answer to the nearest whole number, e.g.,
32.)
Value of the firm
$
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