An Unlevered Firm Has After-Tax Net Income = $125,000

question 365

Multiple Choice

An unlevered firm has after-tax net income = $125,000. The unlevered cost of capital is 13% and the corporate tax rate is 34%. What is the value of this firm?

• A) $594,102
• B) $634,615
• C) $729,654
• D) $961,538
• E) $1,051,591

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Definitions:

Wage Differential

The variation in wages received by individuals due to differences in job characteristics, location, industry, or within the same organization.

Discrimination

Unfair or prejudicial treatment of individuals or groups based on characteristics such as race, gender, age, or sexual orientation.

Competitive Labor Market

A market where numerous buyers and sellers interact to determine the price and quantity of labor, ensuring no single entity can dictate the market terms.

Wage Discrimination

The practice of paying different wages to workers who perform similar tasks, based on non-performance-related factors such as race, gender, religion, or nationality.