Consider the Modigliani and Miller world of corporate taxes.An unlevered (all-equity)firm value is $400 million.By adding debt,the annual interest expense is $150 million,the corporate tax rate is 20%,and the discount rate on the tax shield is 8%.What is the value of the firm after adding debt?

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The Answer of Consider the Modigliani and Miller world of corporate taxes.An unlevered (all-equity)firm value is $400 million.By adding debt,the annual interest expense is $150 million,the corporate tax rate is 20%,and the discount rate on the tax shield is 8%.What is the value of the firm after adding debt?

Consider the Modigliani and Miller World of Corporate Taxes