Question: EBIT = $ 4 , 5 0 0 , 0 0 0 3 0 - year maturity, 3 , 0 0 0 annual coupon bonds

EBIT = $4,500,000
30- year maturity, 3,000 annual coupon bonds (number of bonds =3000) with a coupon rate of 10% and a current market value of $2000 per bond.
20-year maturity, 2,000 semi-annual coupon bonds with a coupon rate of 8%, traded at 100% of their principal value.
Tax rate =0.21
Cost of unlevered equity RU=20%
The bond par value for this firm is $1,000 per bond, regardless of maturity
Assuming that there is no cost of financial distress. If the firm wants to maintain a cost of levered equity of 20%, wh$4,500,000
$19,455,000
$11,455,000
$8,000,000
$0at is the value of debt it should have on its capital structure?

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