VanMannen Foundations, Inc.(VF)
VanMannen Foundations, Inc.(VF) is a zero-growth company that currently has zero debt, and it has the data shown below.

\begin{array}{lr}\text { EBIT }= & \$ 80,000 \\\text { Growth }= & 0 \% \\\text { Orig cost of equity, } \mathrm{r}_{\mathrm{s}}= & 10.0 \% \\\text { No. of shares }= & 10,000 \\\text { Price per share } & \$ 60.00 \\\text { Tax rate }= & 25 \%\end{array}

-Refer to the data for VanMannen Foundations, Inc.(VF).Now assume that VF is considering changing from its original zero debt capital structure to a new capital structure with even more debt.This results in changes in the cost of debt and equity, and thus to a new WACC and a new value of operations.Assume VF raises the amount of new debt indicated below and uses the funds to purchase and hold T-bills until it makes the stock repurchase.What is the stock price per share immediately after issuing the debt but prior to the repurchase?

\begin{array}{llr}\text { Debt } / \text { Value }= & 40 \% \text { Value of new debt }= & \$ 280,702 \\\text { Equity } / \text { Value }= & 60 \% \mathrm{New} \text { W } \mathrm{ACC}= & 8.55 \%\end{array}

A) $66.67
B) $70.18
C) $73.68
D) $77.37
E) $81.24

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