Molotov Cranberry Cocktail Corp Finds That the Value of the Firm

question 52

Multiple Choice

Molotov Cranberry Cocktail Corp finds that the value of the firm is equal to $100,000,000 with no debt.It knows that if it issues new debt,the value of the tax shield will be $3,000,000 while the value of the bankruptcy costs,outside agency costs and inside agency costs will be $1,000,000,$2,000,000,and $4,000,000 in that order.What will the value of Molotov be if it issues the debt?

• A) $0
• B) $96,000,000
• C) $100,000,000
• D) none of the above

---

Definitions:

Personal Branding

A pop term for marketing yourself, including job searching. It includes an expectation that you will use various options, including social media such as LinkedIn, to market yourself.

Internet

A vast network of computers and other electronic devices connected globally, facilitating data exchange, communication, and access to information.

Marketing Yourself

The process of presenting one's skills, experiences, and personal attributes effectively to employers, clients, or the public, often in the context of job searching or career development.

Electronically Scanned

Pertaining to items or data that have been scanned using electronic devices, converting physical documents into digital format.