What is the value of equity for the leveraged firm

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The firm is an all-equity firm with assets worth $500 million and 100 million shares outstanding. It plans to raise $200 million and use these funds to repurchase shares. The firm's marginal corporate tax is 21%, and it plans to keep its outstanding debt equal to $200 million permanently. What is the value of equity for the leveraged firm? Assuming no financial distress or bankruptcy cost.

A) $158 million

B) $300 million

C) $342 million

D) $458 million

E) $542 million

Reference no: EM133109896

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