Bruce & Co. expects its EBIT to be $95,000 every year forever. The firm can borrow at 9 percent. Bruce currently has no debt, and its cost of equity is 20 percent. The tax rate is 33 percent.

Required:

(a)	What is the value of the firm? (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))

Value of the firm

$

(b)	What will the value of the firm be if Bruce borrows $64,000 and uses the proceeds to repurchase shares of equity? (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))

Value of the firm

$