The Montana Hills Co

Multiple Choice

The Montana Hills Co.has expected earnings before interest and taxes of $17,100,an unlevered cost of capital of 12.4 percent,and debt with both a book and face value of $25,000.The debt has an annual 6.2 percent coupon.If the tax rate is 21 percent,what is the value of the firm?

A) $91,016
B) $137,903
C) $114,194
D) $106,667
E) $146,403