Once Bitten Corp. uses no debt. The weighted average cost of capital is 9 percent. If the company's EBIT is $1,980,000 in perpetuity and there are no taxes, what is the company worth? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) Note: For simplicity, in this chapter we typically assume that net capital spending equals depreciation, and net working capital remains constant. This means that EBIT (net of any taxes) will equal CFFA. Company's Value

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Once Bitten Corp. uses no debt. The weighted average cost of capital is 9 percent. If the
company's EBIT is $1,980,000 in perpetuity and there are no taxes, what is the company
worth? (Do not round intermediate calculations. Enter your answer in dollars, not
millions of dollars, e.g. 1,234,567.)
Note: For simplicity, in this chapter we typically assume that net capital spending equals
depreciation, and net working capital remains constant. This means that EBIT (net of any
taxes) will equal CFFA.
Company's Value
%24
Transcribed Image Text:Once Bitten Corp. uses no debt. The weighted average cost of capital is 9 percent. If the company's EBIT is $1,980,000 in perpetuity and there are no taxes, what is the company worth? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) Note: For simplicity, in this chapter we typically assume that net capital spending equals depreciation, and net working capital remains constant. This means that EBIT (net of any taxes) will equal CFFA. Company's Value %24
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