An unlevered firm has a cost of equity capital of 10%. The firm will invest in a project that will give a one- time cash flow of $33,000 after one year. A levered firm invests in the same project as the unlevered firm. What is the value of the levered value with perfect capital markets? $24,000 $30,000 $36,600 $36.000

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 17P
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An unlevered firm has a cost of equity capital of 10%.
The firm will invest in a project that will give a one-
time cash flow of $33,000 after one year. A levered
firm invests in the same project as the unlevered firm.
What is the value of the levered value with perfect
capital markets?
$24,000
$30,000
$36,600
$36.000
Transcribed Image Text:An unlevered firm has a cost of equity capital of 10%. The firm will invest in a project that will give a one- time cash flow of $33,000 after one year. A levered firm invests in the same project as the unlevered firm. What is the value of the levered value with perfect capital markets? $24,000 $30,000 $36,600 $36.000
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