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The following information applies to following questions in this section. The Kanata-Orleans Railway Limited (KORL) is currently an all equity financed firm, with 6 million
The following information applies to following questions in this section. The Kanata-Orleans Railway Limited (KORL) is currently an all equity financed firm, with 6 million shares authorized and issued. Its current unlevered cost of capital is 9.5\%. In addition, it is expected that its EBIT will be $1.2 million per year for the foreseeable future. Assume that taxes are 35 percent. Question 5 (2 points) Assuming there are NO corporate taxes, what is the current unlevered value of KORL? $19.13 million $13.19 million $11.91 million $11.39 million $12.63 million Question 6 (2 points) Assuming there are corporate taxes (35\%), what is the current unlevered value of KORL? $10.435 million $11.421 million $12.435 million $9.953 million $8.21 million Question 7 (2 points) What would be the approximate price per share? [Assume KORL's unlevered value including corporate taxes is $10.75 million (Note: this is not necessarily the answer to the question above.)] $1.532$1.929$1.792$1.315$2.105
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