77 Correct Inc. is a publicly traded firm, with 100 million diluted shares outstanding, trading at $37.50 per share. The company has $1 billion of debt outstanding, with a cost of debt at 6.5%, at a marginal tax rate of 40%. The company has $100 million of cash on its balance sheet. What is the enterprise value of Correct Inc.?
77 Correct Inc. is a publicly traded firm, with 100 million diluted shares outstanding, trading at $37.50 per share. The company has $1 billion of debt outstanding, with a cost of debt at 6.5%, at a marginal tax rate of 40%. The company has $100 million of cash on its balance sheet. What is the enterprise value of Correct Inc.?
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 13P
Related questions
Question
None
Transcribed Image Text:77 Correct Inc. is a publicly traded firm, with 100 million
diluted shares outstanding, trading at $37.50 per share.
The company has $1 billion of debt outstanding, with a
cost of debt at 6.5%, at a marginal tax rate of 40%. The
company has $100 million of cash on its balance sheet.
What is the enterprise value of Correct Inc.?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning