1. Amazon is an all-equity firm assuming perpetual EBIT of $300,000. The current cost of equity is 12% and the tax rate is 21%. The company is in the process of issuing $900,000 perpetual bonds with an annual coupon rate of 6% at par. What is the value of the levered firm?

Answer rating: 100% (QA)

Step 1 Calculate the unlevered firm value ... View the full answer