The Brassy Co

question 3

Multiple Choice

The Brassy Co. has expected EBIT of $910, debt with a face and market value of $2,000 paying an 8.5% annual coupon, and an unlevered cost of capital of 12%. If the tax rate is 34%, what is the value of the Brassy's equity?

• A) $3,258
• B) $3,685
• C) $5,685
• D) $6,325
• E) $7,005

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Definitions:

Celebratory

Pertaining to or involving activities done in honor of an event or achievement.

Appreciation

An increase in the value of an asset over time.

Norming Stage

A phase in team development where members resolve conflicts, increase cohesiveness, and establish norms for teamwork.

Agreement

A mutual understanding or arrangement, typically formalized in a contract, between two or more parties regarding their rights and responsibilities.