Bassett Fruit Farm expects its EBIT to be $345,000 a year forever. Currently, the firm...
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Bassett Fruit Farm expects its EBIT to be $345,000 a year forever. Currently, the firm has no debt. The cost of equity is 12.5 percent and the tax rate is 34 percent. The company is in the process of issuing $2.5 million worth of bonds at par that carry an annual coupon of 6.1 percent. What is the unlevered value of the firm?
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