A company has the following data.
a) What’s present value of the debt (DTc)?
b) What’s the value of the unlevered firm (Vu)?
c) What is the value of the levered firm (Vl) ?
•EBIT = $100 million
•Tax rate = 40%
•Debt (D) = $200 million
•cost of debt (Rd)= 6%,
•unlevered cost of capital (Ru)= 12%