Multiple Choice
consultant has collected the following information regarding Young Publishing: The company has no growth opportunities The consultant believes that if the company moves to a capital structure financed with 20% debt and 80% equity (based on market values) that the cost of equity will increase to 11% and that the pre-tax cost of debt will be 10%.If the company makes this change, what would be the total market value (in millions) of the firm?
A) $3,200
B) $3,600
C) $4,000
D) $4,200
E) $4,800
Correct Answer:
Verified
Correct Answer:
Verified
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