Houston Tools Has Expected Earnings Before Interest and Taxes of $189,400,an

question 12

Multiple Choice

Houston Tools has expected earnings before interest and taxes of $189,400,an unlevered cost of capital of 12.87 percent,and a tax rate of 34 percent.The company has $318,000 of debt that carries a coupon rate of 6.2 percent.The debt is selling at par value.What is the value of this firm?

• A)$996,758.89
• B)$1,079,402.05
• C)$978,758.89
• D)$1,113,758.89
• E)$1,036,758.89

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Definitions:

Technological Innovations

Novel inventions and improvements in technology that significantly change how tasks are accomplished or lead to the creation of new products.

Social Innovations

Innovations that are social in both their ends and means, specifically designed to meet social needs and create new social relationships or collaborations.

Performance Anxiety

The extreme fear or nervousness before or during an individual's performance (such as public speaking, performing arts, or sports), which can impair their ability to perform effectively.

Social Phobia

A rephrased definition: A specific anxiety disorder characterized by a significant amount of fear in one or more social situations, causing considerable distress and impaired ability to function in at least some parts of daily life.