Multiple Choice
Northwestern Lumber Products currently has 15,000 shares of stock outstanding.Patricia,the financial manager,is considering issuing $120,000 of debt at an interest rate of 6.75 percent.Given this,how many shares of stock will be outstanding once the debt is issued if the break-even level of EBIT between these two capital structure options is $60,000? Ignore taxes.
A) 12,975 shares
B) 13,650 shares
C) 14,025 shares
D) 14,550 shares
E) 15,000 shares
Correct Answer:
Verified
Correct Answer:
Verified
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