Multiple Choice
Learn and Earn Company is financed entirely by common stock that is priced to offer a 20% expected return.If the company repurchases 50% of the stock and substitutes an equal value of debt yielding 8%,what is the expected return on its common stock after refinancing?
A) 32%
B) 28%
C) 20%
D) 14%
Correct Answer:
Verified
Correct Answer:
Verified
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