Bruce & Co

question 11

Multiple Choice

Bruce & Co. expects its EBIT to be $100,000 every year forever. The firm can borrow at 10 percent. Bruce currently has no debt, and its cost of equity is 20 percent. The tax rate is 31 percent. What will the value of Bruce & Co. be if the firm borrows $54,000 and uses the loan proceeds to repurchase shares?

• A)$280,130
• B)$346,600
• C)$361,740
• D)$378,900
• E)$381,520

---

Definitions:

Asexual Reproduction

A mode of reproduction involving only one parent that results in offspring genetically identical to the parent, occurring without the fusion of gametes.

Crossing Over

Crossing over is a genetic process that occurs during meiosis where homologous chromosomes exchange segments, leading to genetic diversity in gametes.

Alleles

Variants of a gene that determine distinct traits that can be passed from parents to offspring.

Genetic Diversity

The total number of genetic characteristics in the genetic makeup of a species, contributing to its ability to adapt to changing environments.