Dickson Corporation is comparing two different capital structures. Plan I would result in 35,000 shares of stock and $100,50 Plan II would result in 29,000 shares of stock and $301,500 in debt. The interest rate on the debt is 7 percent. Assume that I be $140,000. An all-equity plan would result in 38,000 shares of stock outstanding. Ignore taxes. What is the price per share under Plan I? Plan II? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16. Plan 1 Plan Il

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Dickson Corporation is comparing two different capital structures. Plan I would result in 35,000 shares of stock and $100,500 in
Plan II would result in 29,000 shares of stock and $301,500 in debt. The interest rate on the debt is 7 percent. Assume that EBI
be $140,000. An all-equity plan would result in 38,000 shares of stock outstanding. Ignore taxes. What is the price per share of
under Plan I? Plan II?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
Plan I
Plan II
Transcribed Image Text:Dickson Corporation is comparing two different capital structures. Plan I would result in 35,000 shares of stock and $100,500 in Plan II would result in 29,000 shares of stock and $301,500 in debt. The interest rate on the debt is 7 percent. Assume that EBI be $140,000. An all-equity plan would result in 38,000 shares of stock outstanding. Ignore taxes. What is the price per share of under Plan I? Plan II? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Plan I Plan II
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