The Winter Wear Company Has Expected Earnings Before Interest and Taxes

question 44

Multiple Choice

The Winter Wear Company has expected earnings before interest and taxes of €2,100, an unlevered cost of capital of 14% and a tax rate of 34%.The company also has €2,800 of debt that carries a 7% coupon.The debt is selling at par
Value.What is the value of this firm?

• A)€9,900
• B)€10,852
• C)€11,748
• D)€12,054
• E)€12,700

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