data regarding its financial structure | My Assignment Tutor

Prescott Inc. has the following data regarding its financial structure: Market value of outstanding debt:$2,500,000Value of firm if financed with all equity: $14,450,000Number of shares outstanding:250,000Current price per share: $38.00Tax rate: 35 % What is the decrease in firm value due to expected bankruptcy costs? Lindbergh Company has the following date related to its capital structure: CASE A CASE BEBIT (in perpetuity):$175,000 EBIT (in perpetuity):$175,000Rate on debt:4.0 % Rate on debt:4.0 %Cost of Equity:13.0% Cost of Equity:13.0%Tax Rate:35.0% Tax Rate:35.0%Debt:0 Debt:Borrow $135,000 to buy share    Will have debt in perpetuity What is the value of unlevered firm (Case A) and the levered firm (Case B)

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