A company has an EBIT of $4,405 in perpetuity. The unlevered cost of capital is 15.74%, and there are 25,010 common shares outstanding. The company is considering issuing $9,660 in new bonds at par to add financial leverage. The proceeds of the debt issue will be used to repurchase equity. The YTM of the new debt is 10.83% and the tax rate is 32%. What is the value of the firm before the restructuring?

Question 21 options:

	$17,603
	$18,079
	$18,555
	$19,030
	$19,506

Answer rating: 100% (QA)

Answer Correct answer is 19030 Explanation Before restructuri... View the full answer