Taunton's Is an All-Equity Firm That Has 150,000 Shares of Stock

Multiple Choice

Taunton's is an all-equity firm that has 150,000 shares of stock outstanding.Neal,the financial vice president,is considering borrowing $220,000 at 8.25 percent interest to repurchase 20,000 shares.Ignoring taxes,what is the value of the firm?

A) $1,260,000
B) $1,400,000
C) $1,485,000
D) $1,520,000
E) $1,650,000