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Our firm survives for the next 3 years and then it is dissolved (no residual value). Each of these 3 years, it earns before interest

Our firm survives for the next 3 years and then it is dissolved (no residual value). Each of these 3 years, it earns before interest and taxes $420,000 (i.e., these are the only payoffs that shareholders will ever receive) and has already depreciated its fixed assets. It draws 25% of its financing from 3-year bonds with face value $1,000 (each) that pay an annual coupon of $50 and sell at par. The firm has a beta of 1.2 and faces a corporate tax rate of 20%. The risk free rate is 4% and the expected market return is 14%. What is the value of the firm? a. $3,360,000 b. $789,992 c. $747,259 d. $1,044,478 e. $4,200,000 f. $934,074 g. $2,535,849 h. $991,684 i. $3,239,769 j. $3,169,811 k. $2,584,615 l. $793,347 m. $835,582 n. $987,490

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