Vancouver Skaters Company (VSC)has a before-tax cost of debt of 8%, a debt/equity ratio of 3, and pays tax at the rate of 40%.The unlevered cost of equity for a firm with VSC's risk characteristics is 15%.Debt is $30,000.If VSC expects a perpetual EBIT of $20,000, then the value of the firm is:
A)$80,000
B)$92,000
C)$133,333
D)$190,476

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The Answer of Vancouver Skaters Company (VSC)has a before-tax cost of debt of 8%, a debt/equity ratio of 3, and pays tax at the rate of 40%.The unlevered cost of equity for a firm with VSC's risk characteristics is 15%.Debt is $30,000.If VSC expects a perpetual EBIT of $20,000, then the value of the firm is:
A)$80,000
B)$92,000
C)$133,333
D)$190,476

Vancouver Skaters Company (VSC)has a Before-Tax Cost of Debt of 8