New Schools,Inc

question 51

Multiple Choice

New Schools,Inc.expects an EBIT of $7,000 every year forever.The firm currently has no debt,and its cost of equity is 15 percent.The firm can borrow at 8 percent and the corporate tax rate is 34 percent.What will the value of the firm be if it converts to 50 percent debt?

• A)$31,796.47
• B)$36,036.00
• C)$37,407.16
• D)$37,552.08
• E)$38,119.30

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Definitions:

Being-For-Others

A concept in existential philosophy referring to the aspect of one's existence that is shaped by relationships with others.

Finiteness of Rejection

The concept that rejection has a limited impact over time, helping individuals to recover and move forward from setbacks.

Natural Consequence

The outcome that naturally follows an action or behavior without any external intervention.

Non-Being

A philosophical concept referring to the absence or negation of being or existence.