Question
Strong forever Co.s perpetual EBIT is expected to be $2000000 per year based upon total debt of $200000. The companys cost of debt is 5%,
Strong forever Co.s perpetual EBIT is expected to be $2000000 per year based upon total debt of $200000. The companys cost of debt is 5%, and its required return on companys assets is 10%. In a world without taxes, distress costs or agency problems, what is the value of Strong forever Co.s Co.?
Select one:
a. $20 000 000
b. $15 000 000
c. None of the options
d. $9 900 000
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Financial Management
Authors: Rob Quail, Ricardo J. Rodriguez
2nd Edition
1557868441, 9781557868442
