Tree Farms Currently Has 48,000 Shares of Stock Outstanding and No

Multiple Choice

Tree Farms currently has 48,000 shares of stock outstanding and no debt.The price per share is $22.50.The firm is considering borrowing funds at 8.5 percent interest and using the proceeds to repurchase 1,750 shares of stock.Ignore taxes.How much is the firm borrowing?

A) $42,500
B) $39,375
C) $32,750
D) $32,500
E) $40,000