The Fruit Mart is an all-equity firm with a current cost of equity of 14.7...
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The Fruit Mart is an all-equity firm with a current cost of equity of 14.7 percent. The estimated earnings before interest and taxes are $155,500 annually forever. Currently, the firm has no debt but is in the process of borrowing $700,000 at 8.5 percent interest. The tax rate is 32 percent. What is the value of the unlevered firm?
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