Value of the Levered Firm Assignment
February 27th, 2020
Walkrun Inc. is unlevered and has a value of $800 billion. An otherwise identical but levered firm finances 20% of its capital structure with debt at an 8% interest rate. No growth is expected. Assume the corporate tax rate is 25%. Use the MM model with corporate taxes to determine the value of the levered firm. Enter your answer in billions. For example, an answer of $1 billion should be entered as 1, not 1,000,000,000. Round your answer to the nearest whole number. Get Finance homework help today