A New Business Will Generate a One-Time Cash Flow of $20,000

question 71

Multiple Choice

A new business will generate a one-time cash flow of $20,000 after one year.The business will be financed with 50% equity and 50% debt.If the firm's unlevered equity cost of capital is 10%,what is the levered value of the firm with perfect capital markets?

• A)$18,182
• B)$20,000
• C)$19,000
• D)$22,000
• E)$18,000

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