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Bruce & Co. expects its EBIT to be $200,000 every year, forever. The firm can borrow at 8 percent. Bruce currently has no debt, and
Bruce & Co. expects its EBIT to be $200,000 every year, forever. The firm can borrow at 8 percent. Bruce currently has no debt, and its cost of equity is 16 percent. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) If the tax rate is 35 percent, what is the value of the firm? Value of the firm $ What will the value be if Bruce borrows $141,000 (perpetual debt) and uses the proceeds to repurchase shares? Value of the firm $
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