Back Woods Coffee has expected earnings before interest and taxes of $34,500, an unlevered cost of capital of 14%, and debt with both a book and face value of $20,000. The debt has an annual 7% coupon. The tax rate is 35%. What is the value of the firm?

A) $167,179
B) $174,015
C) $177,778
D) $203,518
E) $241,414

Unlevered Cost

The cost of funding a project without any debt, reflective of the project's risk as if financed entirely by equity.

Annual Coupon

The yearly interest payment made to bondholders, typically expressed as a percentage of the bond's face value.

Tax Rate

The slice of income or profits that is claimed by the government from corporations or people in the form of taxes.