Question
L.A. Clothing has expected earnings before interest and taxes of $ 2,000, an unlevered cost of capital of 15 percent and a tax rate of
L.A. Clothing has expected earnings before interest and taxes of $2,000, an unlevered cost of capital of 15 percent and a tax rate of 34 percent. The company also has $2,800 of debt that carries a 6 percent coupon. The debt is selling at par value. What is the value of this firm?
Multiple Choice
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$12,677.60
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$8,776.80
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$10,727.20
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$9,752.00
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$11,702.40
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Cost Accounting
Authors: Edward B. Deakin, Michael Maher
3rd Edition
0256069190, 978-0256069198
