Calculate the Market Value of Lotle Group, a Firm with Total

question 55

Multiple Choice

Calculate the market value of Lotle Group, a firm with total assets of $80 million and $30 million of perpetual debt in its capital structure. The firm's cost of equity is 14%, and the cost of debt is 9%. Lotle expects annual, perpetual net operating income (EBIT) of $9 million and a marginal tax rate of 40%.

• A) $30 million
• B) $61.3 million
• C) $57 million
• D) $64.3 million

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Nutrient

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