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The LaSalle Firm is unlevered with assets of $30 million and EBIT of $6 million If the firm's tax rate is 34%, calculate both its
The LaSalle Firm is unlevered with assets of $30 million and EBIT of $6 million If the firm's tax rate is 34%, calculate both its after-tax cash flow and ils value given a risk adjusted discount rate of 12% O a $2,400,000, 530,000,000 Ob $2.400,000 $2,400,000 Oc$3,960,000, $33,000,000 Od 53,960,000, $30,000,000 Oe $2,400,000 $33,000,000 Dorval Corporation uses no debt, its beta is 1.10, and its tax rate is 40% However, the CFO is considering moving to a capital structure with 30% debt and 70% equity. If the risk-free rate is 50% and the market risk premium is 60%, by how much would the capital structure shift change the firm's cost of equity? a 193% OD 163% OC 1709 Co 158% None of the above Marks A firm has zero debt in its capital structure. Its overall cost of capital is 9%. The firm is considering a new capital structure with 60% debt. The interest rate on the debt would be 4%. Assuming that the corporate tax rate is 34%, its cost of equity capital with the new capital structure would be? Oa 10.32% Ob 11.2% Oc 11.0% Od 13 95% ce None of the above
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