Best Bagels, Inc. (BB) Best Bagels, Inc. (BB) currently has zero debt. Its earnings before interest and taxes (EBIT) are $100,000, and it is a zero growth company. BB's current cost of equity is 13%, and its tax rate is 40%. The firm has 20,000 shares of common stock outstanding selling at a price per share of $23.08. Refer to the data for Best Bagels, Inc. (BB). BB is considering moving to a capital structure that is comprised of 20% debt and 80% equity, based on market values. The debt would have an interest rate of %6. 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 14%. If this plan were carried out, what would BB's new value of operations be? a. $498,389 O b. 5525 237 03 O c. 5512.188 O d. 5540 239 O e. $590.718 Which of the following statements is CORRECT? As a firm increases the operating leverage used to produce a given quantity of output, this will a. normally lead to a reduction in its fixed assets turnover ratio. O b.normally lead to a decrease in its business risk. 03 c.normally lead to a decrease in the standard deviation of its expected EBIT. d. normally lead to a decrease in the variability of its expected EPS. o e, normally lead to an increase in its fixed assets turnover natio