Multiple Choice
The Montana Hills Co. has expected earnings before interest and taxes of $8,100,an unlevered cost of capital of 11%,and debt with both a book and face value of $12,000. The debt has an annual 8% coupon. The tax rate is 34%. What is the value of the firm?
A) $48,600
B) $50,000
C) $52,680
D) $56,667
E) $60,600
Correct Answer:
Verified
Correct Answer:
Verified
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