(INFO FROM ABOVE - Bruce & Co. expects its EBIT to be $100,000 every year...
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(INFO FROM ABOVE - Bruce & Co. expects its EBIT to be $100,000 every year forever. The firm can borrow at 11 percent. Bruce currently has no debt, and its cost of equity is 18 percent. The tax rate is 31 percent. What is the companys (unlevered) value currently? - Answer $383,333) Using information from the above for Bruce & Co. If Bruce decides to increase its debt-equity ratio (D/E) to 0.5. What is the cost of equity of Bruce & Co. after taking on the leverage? A. 20.42 percent B. 21.50 percent C. 22.83 percent D. No enough information to determine
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