The Montana Mount Co

Multiple Choice

The Montana Mount 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