Firm Valuation Through Excess Returns Approach The incorporation of XYZ Inc. was completed through the raising of funds. These funds include net proceeds from debt and from equity at P5,000,000 and P20,000,000 respectively. The after-tax costs of debt and of equity are 9% and 15% in order. If the actual return of XYZ is forecasted to be 17% annually over the firm’s 10-year life, compute the firm value.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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 Firm Valuation Through Excess Returns Approach
The incorporation of XYZ Inc. was completed through the raising of funds. These funds include net proceeds from debt and from equity at P5,000,000 and P20,000,000 respectively. The after-tax costs of debt and of equity are 9% and 15% in order. If the actual return of XYZ is forecasted to be 17% annually over the firm’s 10-year life, compute the firm value.

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