Wookie's Is an All-Equity Firm That Has 250,000 Shares of Stock

Multiple Choice

Wookie's is an all-equity firm that has 250,000 shares of stock outstanding.Neal, the financial vice president, is considering borrowing $450,000 at 7 percent interest to repurchase 60,000 shares.Ignoring taxes, what is the current value of the firm?

A) $1,375,000
B) $1,945,000
C) $1,600,000
D) $1,635,000
E) $1,875,000