Question

The ABC corp. is expected to have the earnings before interest and taxes of $60,000 and
the unlevered cost of capital of the company is 12%. The corporate tax rate is 30%. If the
company has issued a debt of $20,000 at par with annual coupon rate of 10%, what is the
value of the levered firm?
Calculate the value of the levered firm?
(A) The value of the levered firm is $356,000
(B) The value of the levered firm is $352,850
(C) The value of the levered firm is $350,000
(D) The value of the levered firm is $352,000
Answer
A
b
c
d​

Answer 1

Answer:

a is the answer of your questions ok