A Firm Is Currently Financed with 50% Equity and 50

Multiple Choice

A firm is currently financed with 50% equity and 50% debt.The firm generates perpetual earnings after taxes and interest rates of $10 million per year.The firm's cost of equity is 14%,its cost of debt is 7%,and it has a tax rate of 30%.What is the value of the levered firm?

A) $10 million
B) $73 million
C) $105.8 million
D) $173.5 million
E) $100 million