Dart Industries has earnings before interest and taxes of $800,000 and a corporate tax rate...
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Finance
Dart Industries has earnings before interest and taxes of $800,000 and a corporate tax rate of 40 percent. The firms before-tax cost of debt is 10 percent, and its cost of equity in the
absence of borrowing is 15 percent. According to the Modigliani and Miller approach to capital structure with corporate taxes, what is the total market value of Dart industries with
no leverage assuming that the company earnings will remain constant in the future?
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