Question
Kline Construction is an all-equity firm that has projected perpetual EBIT of $296,000. The current cost of equity is 11.7 percent and the tax rate
Kline Construction is an all-equity firm that has projected perpetual EBIT of $296,000. The current cost of equity is 11.7 percent and the tax rate is 39 percent. The company is in the process of issuing $912,000 worth of perpetual bonds with an annual coupon rate of 5.9 percent at par. What is the value of the levered firm?
Multiple Choice
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$1,898,928
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$1,714,720
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$1,806,824
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$1,388,923
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$1,543,248
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Day Trading Strategies And Risk Management
Authors: Richard N. Williams
1st Edition
979-8863610528
