QUESTION
Jordan, Corp., has debt outstanding with a market value of $\$ 3$ million. The value of the firm would be $\$ X$ million if it were entirely financed by equity. The company also has 360,000 shares of stock outstanding that sell at $\$ 50$ per share. The corporate tax rate is 30 percent. The expected bankruptcy cost is 0.9 million. If there is no other market friction like agency cost/benefit, what is $X$ ? $\$ 23$ million $\$ 24$ million $\$ 25$ million $\$ 21$ million
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