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Watson's Feed Mill Is an All Equity Firm That Has

Question 136

Multiple Choice

Watson's Feed Mill is an all equity firm that has 20,000 shares of stock outstanding. The company has decided to borrow $400,000 to buy out the shares of a family stockholder who holds 1,200 shares. What is the total value of this firm if you ignore taxes?


A) $5.48 million
B) $6.00 million
C) $6.42 million
D) $6.67 million
E) $7.00 million

Correct Answer:

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