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What is the market value of the firm of ABC Company

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Reference no: EM132916705

Problem 1: ABC Company has expected earnings before interest and taxes (EBIT) of 800,000 and interest costs of ?80,000. The firm's equity and debt capitalization rates are 12 percent and 8 percent, respectively. Assume no corporate income taxes. What is the market value of the firm?

a. 7,000,000
b. 9,000,000
c. 8,000,000
d. 6,000,000

Reference no: EM132916705

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