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QUESTION 6 Questions 2 - 6 are based on the following description about Bethlehema Steel Company. Bethlehema Steel is a publicly traded steel company with

QUESTION 6
Questions 2-6 are based on the following description about Bethlehema Steel Company.
Bethlehema Steel is a publicly traded steel company with $60 million in outstanding debt and $40 million in market value of equity. Assuming the
firm is correctly priced. The firm's cost capital currently is 12% and is expected to generate $16 million in EBIT(1-T) next year. The firm is expected
to grow in stable growth at 4% a year in perpetuity. To support the growth, the firm needs to invest 50% of its EBIT(1-T) in fixed assets and working
capital. You believe if you acquire the control of the firm, you can sell idle assets for $40 million and lower the cost of capital to 10%(Plan A).
Following 4(Plan B), what would be the value of the control in this case?
a.56.25
b.75
C.84.05
d.150
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