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QUESTION
Connor Corp. has an EBIT of $980,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 14 percent,...
Connor Corp. has an EBIT of $980,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 14 percent, and the corporate tax rate is 35 percent. The company also has a perpetual bond issue outstanding with a market value of $1.93 million.
