Multiple Choice
Lamont Corp. is debt-free and has a weighted average cost of capital of 12.7 percent. The current market value of the equity is $2.3 million and there are no taxes. According to M&M Proposition I, what will be the value of the company if it changes to a debt-equity ratio of .85?
A) $18,110,236
B) $1,955,000
C) $15,393,701
D) $2,705,882
E) $2,300,000
Correct Answer:
Verified
Correct Answer:
Verified
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