What is the total market value of the firm?

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240,000 bonds with $1k face value with 7.5% coupons with yrly. payments, 20 yrs. to maturity,& currently sells for $940. Marginal tax rate is 40%. Equity is 9M shares, selling for $71@share, beta is 1.2, risk free rate 1%,& market risk premium is 10%

May 4th, 2015

A firms market value is the number of shares outstanding x price per share. So it is: 9,000,000 x $71 = $6,390,000. The market value of the firm is $6,390,000.

May 4th, 2015

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