Vancouver Skaters Company (VSC)has a Before-Tax Cost of Debt of 8

Multiple Choice

Vancouver Skaters Company (VSC) has a before-tax cost of debt of 8%, a debt/equity ratio of 3, and pays tax at the rate of 40%.The unlevered cost of equity for a firm with VSC's risk characteristics is 15%.Debt is $30,000.If VSC expects a perpetual EBIT of $20,000, then the value of the firm is:

A) $80,000
B) $92,000
C) $133,333
D) $190,476