Winnipeg Skaters Company (WSC)has a Before-Tax Cost of Debt of 8

Multiple Choice

Winnipeg Skaters Company (WSC) has a before-tax cost of debt of 8%, a debt/equity ratio of 0, and pays tax at the rate of 40%.The unlevered cost of equity for a firm with WSC's risk characteristics is 15%.If WSC expects a perpetual EBIT of $20,000, then the value of the firm is:

A) $43,478
B) $80,000
C) $133,333
D) $190,476