According to CFAI volume 3, page 132, problem #17: Value of Unlevered Firm = EBIT / cost of equity. The tax rate in problem is provided. Shouldn’t the value of the firm be EBIT*(1-T)/ cost of equity? This produces a very different answer.
According to CFAI volume 3, page 132, problem #17: Value of Unlevered Firm = EBIT / cost of equity. The tax rate in problem is provided. Shouldn’t the value of the firm be EBIT*(1-T)/ cost of equity? This produces a very different answer.