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. $4,200,000

b. $3,239,769

c. $2,535,849

d. $2,584,615

e. $835,582

f. $793,347

g. $747,259

h. $3,360,000

i. $789,992

j. $991,684

k. $987,490

l. $934,074

m. $3,169,811

n. $1,044,478