NO.PZ2023112701000068
问题如下：
The firm ABC is a US-based unleveraged firm with market value of $50 million. ABC plans to issue $10 million in debt to retire an equivalent amount of equity. Corporate tax rate is 20%.
A financial analyst notes that the tax shield advantage of debt is offset due to the risk of financial distress. He estimates the present value of the cost of financial distress at above debt level is 1 million.
Including the present value of the cost of distress, the value of ABC is closest to:
选项：
A.49 million
B.50 million
C.51 million
解释：
Correct Answer: C
C is correct. With financial distress included, as debt is added to the capital structure, the levered value of the firm is given by:
题目里不是说the tax shield of the debt is offset by the distress cost吗？这样的话公司价值就还是等于50啊
