Barrier Reef Island Resorts Has No Debt

question 26

Multiple Choice

Barrier Reef Island Resorts has no debt.Its current total value is $58 million.What will the company's value be if it sells $21 million in debt securities and has a tax rate of 30 per cent,assuming that the proceeds will be used to purchase equity?

• A)$51 700 000
• B)$60 300 000
• C)$62 300 000
• D)$64 300 000
• E)$65 140 000

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