Bruin Inc. expects an EBIT of $26,000 every year forever. The firm currently has no debt, and its cost of equity is 14 percent. The tax rate is 35 percent. The firm plans to borrow money to repurchase its stock such that the debt-to-value ratio after the restructuring becomes 50 percent permanently. i) What is the firm value if the firm borrows at 8 percent; ii) What is the firm value if the firm borrows at 5 percent?

a. i)$146,320; ii) $200,069

b. i)$146,320; ii) $146,320

c. i)$146,320; ii) $155,380

d. i)$165,328; ii) $177,821