An all-equity company is considering borrowing $5,000,000 and using the borrowed funds to repurchase shares....
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Accounting
An all-equity company is considering borrowing $5,000,000 and using the borrowed funds to repurchase shares. The company's cost of equity is 10% EBIT is expected to be $2.500.000 every year forever. Assume all available earnings are immediately distributed to common shareholders and all the M&M assumptions are satisfied. If the company proceeds with the capital restructing, what will be the value of the company according to M&M Proposition without taxes? Do not found intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the sign in your response. For example, an answer of $100050 should be entered as 1000.50
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