Consider the attached book$-$value balance sheet for Federico Inc. for $2022.($You can open the

attached spreadsheet in Excel. You have to "Close" the new window to go back to the test.$)$

BV Balance Sheet.xls darr

The firm faces the statutory $21\%$ flat tax rate. There is no debt in the current liabilities. The firm

has $1,500,000$ shares outstanding, which have a current market price of $$57\mathrm{.}50$ per share. You

wish to determine the market$-$value of the firm's capital assets. Assume that the market values

of the current assets, current liabilities and long$-$term debt are equal to their book$-$value. Also,

assume that the non$-$debt long$-$term liabilities have no market value. Remember to consider the

value of the tax shield based on the assumptions of the $1963$ Modigliani and Miller relationship.

What is the market$-$value of the firm's capital assets?

$$83,500,000$

$$125,100,000$

$$137,980,000$

$$86,250,000$

$$116,280,000$