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jake82 jake82
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A month ago
James Bay Water Park operates in a world with zero taxes and no financial distress. The firm has a debt/equity ratio of 1. The cost of equity is 15% and the cost of debt is 8%. The only difference between Whispering Pines Resort and James Bay Water Park is that Whispering Pines Resort has a debt/equity ratio of 2. According to M&M, the value of Whispering Pines Resort will be

▸ greater than James Bay Water Park.

▸ less than James Bay Water Park.

▸ the same as James Bay Water Park.

▸ Insufficient information is provided to answer the question.
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
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rick32rick32
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jake82 Author
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A month ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
prime7105
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Yesterday
Smart ... Thanks!
SlimyPencil
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2 hours ago
Correct Slight Smile TY
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