The Fruit Mart is an all-equity firm with a current cost of equity of 17.4 percent.The estimated earnings before interest and taxes are $169,500 annually forever.Currently, the firm has no debt but is in the process of borrowing $400,000 at 9.5 percent interest.The tax rate is 35 percent.What is the value of the unlevered firm?
A)$649,207
B)$753,571
C)$656,411
D)$719,307
E)$633,190

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The Answer of The Fruit Mart is an all-equity firm with a current cost of equity of 17.4 percent.The estimated earnings before interest and taxes are $169,500 annually forever.Currently, the firm has no debt but is in the process of borrowing $400,000 at 9.5 percent interest.The tax rate is 35 percent.What is the value of the unlevered firm?
A)$649,207
B)$753,571
C)$656,411
D)$719,307
E)$633,190

The Fruit Mart Is an All-Equity Firm with a Current