Multiple Choice
Cool Refreshments has bonds outstanding with a face value of $211,000 that are selling at par.It also has 14,000 shares of stock outstanding that are selling for $16.20 a share.The all-equity value of the firm is $408,000.The tax rate is 35 percent.What is the value of the financial distress costs? Assume there are no other claims on the firm.
A) $44,050
B) $46,800
C) $46,220
D) $45,100
E) $46,550
Correct Answer:
Verified
Correct Answer:
Verified
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