The debt is selling at par value-what is value of firm

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Reference no: EM131355213

L.A. Clothing has expected earnings before interest and taxes of $1,800, an unlevered cost of capital of 12 percent and a tax rate of 33 percent. The company also has $2,500 of debt that carries a 6 percent coupon. The debt is selling at par value. What is the value of this firm?

$11,962.50

$9,787.50

$13,050.00

$10,875.00

$14,137.50

Reference no: EM131355213

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