Marcos & Sons has no debt.Its current total value is $13 million.What will the company's value be if it sells $5 million in debt and has a tax rate of 35 percent? Assume all debt proceeds are used to repurchase equity.
A) $16.25 million
B) $18.00 million
C) $11.25 million
D) $13.00 million
E) $14.75 million
Correct Answer:
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