Maslyn Corp. has an EBIT of $985,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 10 percent, and the corporate tax rate is 35 percent. The company also has a perpetual bond issue outstanding with a market value of $1.94 million. What is the value of the company? (Enter your answer in dollars, not millions of dollars (e.g. 1,234,567). Do not round intermediate calculations and round your answer to 2 decimal places (e.g., 32.16).) Value of the company %24

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Maslyn Corp. has an EBIT of $985,000 per year that is expected to continue in
perpetuity. The unlevered cost of equity for the company is 10 percent, and the
corporate tax rate is 35 percent. The company also has a perpetual bond issue
outstanding with a market value of $1.94 million.
What is the value of the company? (Enter your answer in dollars, not millions of dollars
(e.g. 1,234,567). Do not round intermediate calculations and round your answer to 2
decimal places (e.g., 32.16).)
Value of the
company
%24
Transcribed Image Text:Maslyn Corp. has an EBIT of $985,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 10 percent, and the corporate tax rate is 35 percent. The company also has a perpetual bond issue outstanding with a market value of $1.94 million. What is the value of the company? (Enter your answer in dollars, not millions of dollars (e.g. 1,234,567). Do not round intermediate calculations and round your answer to 2 decimal places (e.g., 32.16).) Value of the company %24
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