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6) A company is currently financed with 50% equity and 50% debt. The company generates earnings...

6) A company is currently financed with 50% equity and 50% debt. The company generates earnings after taxes of $10 million per year. It is expected that these earnings after taxes will remain $10 million forever. The company’s cost of equity is 14%, its cost of debt is 7%, and it has a tax rate of 30%. What is the value of the levered company?

A) $10 million

B) $73 million

C) $105.8 million

D) $173.5 million

E) $100 million

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