A Firm Has a Debt-To-Value Ratio of 40%,a Cost of Equity

question 86

Multiple Choice

A firm has a debt-to-value ratio of 40%,a cost of equity of 14%,and an after-tax cost of debt of 5.5%.It plans to launch a new product that will produce cash flows of $398,000 next year and $211,000 in year 2.If this project is about as risky as the firm's existing assets,what is the present value of the project?

• A) $458,008
• B) $481,707
• C) $500,614
• D) $532,349

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Definitions:

Disparate Treatment

Unequal behavior towards someone because of their race, age, gender, religion, or other protected status that results in discrimination.

Disparate Impact

A form of discrimination that arises when an employer’s policy or practice appears to apply to everyone equally but its actual effect is that it disproportionately limits employment opportunities for a protected class.

Prove Discrimination

The process of demonstrating that unlawful discrimination has occurred, typically requiring evidence of unfair treatment based on race, gender, age, religion, or other protected characteristics.

Age Discrimination

refers to unfair treatment or practices against individuals based on their age, particularly in employment contexts.