Assume That to Fund the Investment Taggart Will Take on $150

question 59

Multiple Choice

Assume that to fund the investment Taggart will take on $150 million in permanent debt with the remainder of the investment funded by a cut in dividends.Assuming Taggart will incur a 2% (after-tax) underwriting fee on the new debt issue,the NPV of Taggart's new rail line is closest to:

• A)$195 million
• B)$200 million
• C)$235 million
• D)$240 million

---

Definitions:

Free Trade

A policy or practice of trading between countries, with minimal restrictions or tariffs, to encourage economic exchange.

Economic Well-being

Refers to the overall quality of life based on financial stability, access to resources, and the ability to meet basic needs.

Transnational Corporations

are business entities that operate in multiple countries but are headquartered in one country, significantly influencing global economics and politics.

Globalization

The process of interaction and integration among people, companies, and governments worldwide, often driven by trade and investment and aided by information technology.