标题: Corp: reading 30 page 129 Q14 and q17: EBIT(1-tax) or not?? [打印本页] 作者: brain_wash_your 时间: 2013-4-12 22:30 标题: Corp: reading 30 page 129 Q14 and q17: EBIT(1-tax) or not??
in q14, for Aquarius’s, it use EBIT(1-tax)/wacc to get total firm value
while in q18, it use EBIT(1-tax)/r (return of equity) to get Vu, then
Vl=Vu+tD, what Vu and Vl mean?
why in q18, when use EBIT to get Vu, no need to be after tax? Thanks.作者: RMontgomery 时间: 2013-4-12 22:30
Vu is value of the firm (unlevered) so without depreciation tax shield
Vl is levered or with the tax shield
I havent looked at the problem but if they assume the MM propositions without taxes then you would not use the after tax number to get value of the firm.
