The Wrangler Co

question 291

Multiple Choice

The Wrangler Co. has expected EBIT = $9,250, debt with a face and market value of $14,000 paying a 9% annual coupon, and an unlevered cost of capital of 12%. If the tax rate is 39%, what is
The value of Wrangler's equity?

• A) $38,481
• B) $52,481
• C) $55,635
• D) $58,525
• E) $65,600

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Definitions:

Vertical Line

A line that runs up and down the page, having an undefined slope and typically used to represent the concept of infinity in coordinate geometry.

Histogram

A graphical representation that displays data by way of bars to show the frequency of numerical data intervals.

Symmetric

Having attributes that are mirrored equally across a central axis or around a central point.

Skewed

A description of a distribution that is not symmetrical, with a majority of data points lying on one side of the mean.