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firm value

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wanttoknow | 05:14 Wed 01st Jun 2005 | Business & Finance
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How do you calculate a firm value if the company is not all equity? Say the company has tax rate 34%, is rated AA, has little debt(face value 2 million and 12% coupon), has 1 million shares outstanding at $40 a share


What will be the new firm value if it issues 10 million (face value) bonds at par and maintains in its capital structure(same tax rate applies) (assiming that new debt does not change the company's credit rating nor causes bankruptcy)

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