Question
XYA Inc. has earnings before interest and taxes of $149,000. Both the book and the market value of debt is $265,000. The unlevered cost of
XYA Inc. has earnings before interest and taxes of $149,000. Both the book and the market value of debt is $265,000. The unlevered cost of equity is 13.5% while the pre-tax cost of debt is 9%. The tax rate is 34%.
- Find the market value of the firm
- the Cost of equity
- the WACC
Please show your work
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Personal Finance Building Your Future
Authors: Robert B. Walker, Kristy P. Walker
1st edition
9780077861728, 978-0073530659
