Assume That PP Is Considering Changing from Its Original Capital

Multiple Choice

Assume that PP is considering changing from its original capital structure to a new capital structure with 35% debt and 65% equity.This results in a weighted average cost of capital equal to 9.4% and a new value of operations of $510,638.Assume PP raises $178,723 in new debt and purchases T-bills to hold until it makes the stock repurchase.PP then sells the T-bills and uses the proceeds to repurchase stock.How many shares remain after the repurchase, and what is the stock price per share immediately after the repurchase?

A) 7,500; $71.49
B) 7,000; $59.57
C) 6,500; $51.06
D) 6,649; $53.33
E) 6,959; $58.78