The Addopa Co. has a projected annual EBIT of $5,000. The company is currently 100% equity ﬁnanced with a cost of equity of 14%. The tax rate is 34% and the cost of debt is 10%. What is the
Value of the ﬁrm if they borrow $12,000?
A) $23,571
B) $24,771
C) $26,009
D) $27,651
E) $29,229

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The Answer of The Addopa Co. has a projected annual EBIT of $5,000. The company is currently 100% equity ﬁnanced with a cost of equity of 14%. The tax rate is 34% and the cost of debt is 10%. What is the
Value of the ﬁrm if they borrow $12,000?
A) $23,571
B) $24,771
C) $26,009
D) $27,651
E) $29,229