The Winter Wear Company Has Expected Earnings Before Interest and Taxes

Multiple Choice

The Winter Wear Company has expected earnings before interest and taxes of $3,800,an unlevered cost of capital of 15.4 percent and a tax rate of 22 percent.The company also has $2,600 of debt with a coupon rate of 5.7 percent.The debt is selling at par value.What is the value of this firm?

A) $15,585
B) $19,819
C) $12,115
D) $12,055
E) $17,700