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Best Bagels, Inc. ( BB ) Best Bagels, Inc. ( BB ) currently has zero debt. Its earnings before interest and taxes ( EBIT )
Best Bagels, Inc. BB
Best Bagels, Inc. BB currently has zero debt. Its earnings before interest and taxes EBIT are $ and it is a zero growth company. BBs current cost of equity is and its tax rate is The firm has shares of common stock outstanding selling at a price per share of $
Refer to the data for Best Bagels, Inc. BB BB is considering moving to a capital structure that is comprised of debt and equity, based on market values. The debt would have an interest rate of The new funds would be used to repurchase stock. It is estimated that the increase in risk resulting from the additional leverage would cause the required rate of return on equity to rise to If this plan were carried out, what would BBs new value of operations be
a $
b $
c $
d $
e $
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