Question 8

Linkcomn expects an Earnings before Taxes of 750000S every year. The firm currently has 100% Equity and cost of raising equity is 12%. If the company can borrow debt with an interest of 10%. What

will be the value of the company if the company takes on a debt equal to 60% of its levered value? What will be the value of the company if the company takes on a debt equal to 50% of its levered

value? Assume the company's tax rate is 20%.(Must show the steps of calculation)

estion 8 5 points Save Answer Linkcomn expects an Earnings before Taxes of 7500005 every year. The firm currently has 100% Equity and cost of raising equity is 12% If the company can borrow debt with an interest of 10%. What will be the value of the company if the company takes on a debt equal to 60% of its levered value? What will be the value of the company if the company takes on a debt equal to 50% of its levered value? Assunie the company's tax rate is 20% (Must show the steps of calculation) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac) BIU & Paragraph V Arial EY 10pt *** EV AV I 2 V V X 0 O WORDS POWERED BY TIM SAMSUNG