Lucky Day Campgrounds Has Expected Earnings Before Interest and Taxes

question 80

Multiple Choice

Lucky Day Campgrounds has expected earnings before interest and taxes of $6,200, an unlevered cost of capital of 12%, and a tax rate of 35%. The company also has $24,000 of debt that carries an
8% coupon. The debt is selling at par value. What is the value of this firm?

• A) $32,609
• B) $34,811
• C) $37,141
• D) $39,617
• E) $41,983

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Definitions:

Low Conscientiousness

Describes an individual who may display a lack of attention to detail, poor organization, and a casual approach to tasks and responsibilities.

Behavioral Problems

Refers to actions and attitudes that are socially unacceptable, disruptive, or harmful to oneself or others.

High Extraversion

A personality trait that encapsulates qualities such as sociability, enthusiasm, and assertiveness, leading individuals to seek out social stimulation and enjoy being around others.

Personality Disorders

A group of mental disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience, exhibited across many contexts and deviating from those accepted by the individual's culture.