What will the value be if GT borrows $500,000 and uses the proceeds to repurchase shares? 1 answer below »


General Tools (GT) expects EBIT to be $100,000 complete year, in continuity. The established can attribute at 10 percent. GT currently has no debit. Its consume of equity is 25 percent. If the urbane tax objurgate is 40 percent, what is the appraise of the established? What procure the appraise be if GT attributes $500,000 and uses the allowance to discharge shares?