Top Posters
Since Sunday
9
T
8
D
8
t
7
j
7
m
7
m
7
o
6
l
6
g
6
Y
6
S
6
New Topic  
wrote...
Posts: 728
Rep: 0 0
A year ago
Suppose that to raise the funds for the initial investment the firm borrows $40,000 at the risk free rate and issues new equity to cover the remainder.  In this situation, the value of the firm's levered equity from the project is closest to:
A) $0
B) $50,000
C) $90,000
D) $40,000
Textbook 

Corporate Finance: The Core


Edition: 4th
Authors:
Read 33 times
1 Reply
Replies
Answer verified by a subject expert
wrote...
Top Poster
Posts: 694
Rep: 9 0
A year ago
Sign in or Sign up in seconds to unlock everything.
B
Explanation:  B) PV(equity cash flows) =   = $90,000 - $40,000 = $50,000
1

Related Topics

New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers.
Learn More
Improve Grades
Help Others
Save Time
Accessible 24/7
  105 People Browsing
 126 Signed Up Today
Your Opinion
Which 'study break' activity do you find most distracting?
Votes: 162

Related Images
 141
 96
 73