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
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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.?
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