ABC is an all-equity firm that has 43,240 shares of stock outstanding at a market price of $15.97 per share. The firm is considering a capital structure with 50% debt at a rate of 6% and use the proceeds to repurchase shares. Determine the shares outstanding once the debt is issued.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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General Accounting

ABC is an all-equity firm that has 43,240
shares of stock outstanding at a market price
of $15.97 per share. The firm is considering
a capital structure with 50% debt at a rate of
6% and use the proceeds to repurchase
shares. Determine the shares outstanding
once the debt is issued.
Transcribed Image Text:ABC is an all-equity firm that has 43,240 shares of stock outstanding at a market price of $15.97 per share. The firm is considering a capital structure with 50% debt at a rate of 6% and use the proceeds to repurchase shares. Determine the shares outstanding once the debt is issued.
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