Burkhart and Mueller has no debt.Its current total value is $9.5 million.What will the company's value be if it sells $4 million in debt and has a tax rate of 21 percent? Assume all debt proceeds are used to repurchase equity.
A)$11.84 million
B)$13.59 million
C)$6.84 million
D)$8.59 million
E)$10.34 million

Question

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The Answer of Burkhart and Mueller has no debt.Its current total value is $9.5 million.What will the company's value be if it sells $4 million in debt and has a tax rate of 21 percent? Assume all debt proceeds are used to repurchase equity.
A)$11.84 million
B)$13.59 million
C)$6.84 million
D)$8.59 million
E)$10.34 million

Burkhart and Mueller Has No Debt