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X = 34. An unlevered firm has a weighted average cost of capital of (10+x) percent. The current market value of the unlevered firm $250

X = 34. An unlevered firm has a weighted average cost of capital of (10+x) percent. The current market value of the unlevered firm $250 million. Assuming a perfect capital market and according to M&M Proposition I, what will be the value of the levered company if it changes to a debt-equity ratio of 1?

A) $125 B) $168.75 C) $206.25 D) $250 E) $293.75

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