Calculate the Market Value of a Firm with Total Assets

question 68

Multiple Choice

Calculate the market value of a firm with total assets of $60 million and a net worth of $35 million. The firm's cost of equity is 15%, and the cost of perpetual debt is 8%. The firm has a perpetual net operating income (EBIT) of $4.5 million and a marginal tax rate of 35%.

• A) $41.67 million
• B) $30.00 million
• C) $35.83 million
• D) $30.83 million

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Definitions:

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