Winnipeg Skaters Company (WSC)has a before-tax cost of debt of 8%, a debt/equity ratio of 0, and pays tax at the rate of 40%.The unlevered cost of equity for a firm with WSC's risk characteristics is 15%.If WSC expects a perpetual EBIT of $20,000, then the value of the firm is:
A)$43,478
B)$80,000
C)$133,333
D)$190,476

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The Answer of Winnipeg Skaters Company (WSC)has a before-tax cost of debt of 8%, a debt/equity ratio of 0, and pays tax at the rate of 40%.The unlevered cost of equity for a firm with WSC's risk characteristics is 15%.If WSC expects a perpetual EBIT of $20,000, then the value of the firm is:
A)$43,478
B)$80,000
C)$133,333
D)$190,476

Winnipeg Skaters Company (WSC)has a Before-Tax Cost of Debt of 8