Answer the Following Question(s)using the Information Below

question 2

Multiple Choice

Answer the following question(s) using the information below:
Coldbrook Company has two sources of funds: long-term debt with a market and book value of $15 million issued at an interest rate of 10%, and equity capital that has a market value of $9 million (book value of $5 million) .Coldbrook Company has profit centres in the following locations with the following operating incomes, total assets, and current liabilities.The cost of equity capital is 15%, while the tax rate is 30%.
-What is the for Brooksville?

• A)$476,250
• B)$428,000
• C)$415,525
• D)$390,000
• E)$318,750

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Definitions:

Cash

Cash is a medium of exchange in the form of physical currency, such as coins and banknotes.

Target Shareholders

Individuals or entities that own shares in a company that is the subject of a merger or acquisition proposal.

Self-Tender Offer

A takeover-resistance strategy in which a target corporation offers to buy its shareholders’ stock.

Leveraged Buyout

The acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition.