Question
Levered Brothers, Inc. has a debt/equity ratio, D/E (in market value terms), of one. The corporate tax rate for the company, T C , is
Levered Brothers, Inc. has a debt/equity ratio, D/E (in market value terms), of one. The corporate tax rate for the company, TC , is 40%. The company is expected to generate annual free cash flows of $215 million, every year indefinitely. The current weighted average cost of capital for the company is 15%. What would be the unlevered value of the company, Vu, (i.e. the value of the company if the company is 100% equity financed) (hint: MM theory with tax)?
| A. | 1433.3 million
| |
| B. | 688 million
| |
| C. | 1146.7 million
| |
| D. | 860.0 million
|
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A Full Guide To Bitcoin Investment
Authors: J.b. Yupangco
1st Edition
8389911302, 978-8389911308
