The Brassy Co

question 70

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:

Concrete Class

A class that has an implementation for all of its methods, as opposed to abstract classes which can contain unimplemented methods.

Abstract Class

A class that cannot be instantiated and is designed to be subclassed, often containing one or more abstract methods which must be implemented by subclasses.

Inner Class

A class defined within another class in Java, useful for logically grouping classes that are only used in one place, improving encapsulation.

Non Static Members

Elements of a class that are specific to each instance and not shared across instances, unlike static members.