A firm has an operating profit of $300,000, interest of $35,000, and a tax rate of 40 percent. The firm has an after-tax cost of debt of 5 percent and a cost of equity of 15 percent
The firm's target capital structure is set at a mix of 40 percent debt and 60 percent equity. Assuming this as the optimum capital structure, the value of the firm is ________.
A) $1.4 million
B) $2.2 million
C) $1.8 million
D) $6.0 million
C
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Which of the following is true regarding your PAP contract?
A) Your personal property is covered while in your automobile. B) Your Medical Payments will pay for your friend's injuries suffered while s/he is occupying your car. C) If you drive a car that you do not own, you will have no coverage for anything. D) All rental cars must be declared to be insured in order to have coverage on them.
Marketing expenses are investments because:
a. brand building, advertising, and many public relations activities are designed to build long term value b. marketing costs are a substantial part of the total cost c. marketing keeps the company going d. none of the above