Question
Question 15 (1.5 points) The SCI company has been fully financed by shareholders' equity (equity) for several years. Its annual profit before interest and tax
Question 15 (1.5 points) The SCI company has been fully financed by shareholders' equity (equity) for several years. Its annual profit before interest and tax (EBIT) is constant. It amounts to $ 5,000,000 and is a life sentence. SCI distributes all its profits in dividends. Its profit tax rate is 40%. In addition, it is assumed that the company can borrow at 10%, as much as necessary to replace all or part of the shareholders' equity, without incurring an increase in the cost of debt. The cost of capital without leverage (debt free) UK is 12%. Calculate the LCV value of the SCI company.
Options
$ 40,000,000.00 $ 45,000,000.00 $ 25,000,000.00 $ 35,000,000.00 $ 50,000,000.00
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started