Calculate the Market Value of Lotle Group, a Firm with Total

Multiple Choice

Calculate the market value of Lotle Group, a firm with total assets of $80 million and $30 million of perpetual debt in its capital structure. The firm's cost of equity is 14%, and the cost of debt is 9%. Lotle expects annual, perpetual net operating income (EBIT) of $9 million and a marginal tax rate of 40%.

A) $30 million
B) $61.3 million
C) $57 million
D) $64.3 million