A fiRm Has a Tax Rate of 35%, an Unlevered

question 123

Multiple Choice

A firm has a tax rate of 35%, an unlevered rate of return of 14%, total debt of $1,000, and an EBIT of $300.00. What is the unlevered value of the firm?

• A) $27
• B) $393
• C) $1,027
• D) $1,393
• E) $2,143

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Definitions:

Family of Orientation

The family into which an individual is born or adopted, encompassing parents and siblings.

Census Family

A unit defined by statistics agencies for the census, usually consisting of a household of related individuals, such as parents and their children.

Conjugal Family

A family unit consisting of a married couple and their children, emphasizing the relationship between the spouses.

Family of Procreation

Refers to the family unit created by an individual, together with their partner and children, distinct from the family of origin in which the individual was born or raised.