consultant has collected the following information regarding Young Publishing: The company has no growth opportunities The consultant believes that if the company moves to a capital structure financed with 20% debt and 80% equity (based on market values) that the cost of equity will increase to 11% and that the pre-tax cost of debt will be 10%.If the company makes this change, what would be the total market value (in millions) of the firm?
A)$3,200
B)$3,600
C)$4,000
D)$4,200
E)$4,800

Question

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The Answer of consultant has collected the following information regarding Young Publishing: The company has no growth opportunities The consultant believes that if the company moves to a capital structure financed with 20% debt and 80% equity (based on market values) that the cost of equity will increase to 11% and that the pre-tax cost of debt will be 10%.If the company makes this change, what would be the total market value (in millions) of the firm?
A)$3,200
B)$3,600
C)$4,000
D)$4,200
E)$4,800

Consultant Has Collected the Following Information Regarding Young Publishing: the Company