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Business, 10.03.2020 03:08 ssargeant2559

Charisma, Inc., has debt outstanding with a face value of $5.5 million. The value of the firm if it were entirely financed by equity would be $24.7 million. The company also has 390,000 shares of stock outstanding that sell at a price of $51 per share. The corporate tax rate is 25 percent. What is the decrease in the value of the company due to expected bankruptcy costs

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Charisma, Inc., has debt outstanding with a face value of $5.5 million. The value of the firm if it...
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