Charisma, Inc., has debt outstanding with a face value of $6.2 million. The value of the firm if it were entirely financed by equity would be $29.9 million. The company also has 425,000 shares of stock outstanding that sell at a price of $58 per share. The corporate tax rate is 22 percent. What is the decrease in the value of the company due to expected bankruptcy costs

Decrease in value of company due to expected bankruptcy cost = $414,000

Explanation:

As per the data given in the question,

According to M & M proportional I with taxes,

Levered firm value is = Equity + Debt

= $29,900,000 + 0.22 × $6,200,000

= $31,264,000

Market value of the firm = market value of debt + market value of equity

= $6,200,000 + 425,000 × $58

= $30,850,000

Decrease in value of company due to expected bankruptcy cost = $31,264,000 - $30,850,000

= $414,000

the answer is: c.that person might be arrested and deported

filling w-4 form incorrectly usually would rise suspicions from government's auditors. when they notice such mistakes, they would send their teams to investigate the situation further.

if those investigation teams believe that the incorrectness is done on purpose (with malicious intent), that person can be arrested or deported

a.