Use the Following Information to Answer the Question(s)below

question 84

Multiple Choice

Use the following information to answer the question(s) below.
Galt Industries is expected to generate free cash flows of $24 million per year.Galt has permanent debt of $80 million,a corporate tax rate of 40%,and an unlevered cost of capital of 12% and its cost of debt capital is 6%.
-The value of Galt's equity using the APV method is closest to:

• A)$150 million
• B)$180 million
• C)$230 million
• D)$240 million

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Definitions:

Logrolling

A practice in politics where two or more parties agree to vote for each other's proposed legislation or interests.

Political Corruption

Involves the misuse of public power for private benefit, typically through bribery or embezzlement.

Government Officials

Individuals who hold positions of authority in government institutions and are responsible for making and enforcing rules and laws.

Pork Barrel

Government spending for localized projects secured primarily to bring money to a representative's district, often criticized as wasteful and politically motivated.