Thompson & Thomson Is an All-Equity Firm That Has 280,000

Multiple Choice

Thompson & Thomson is an all-equity firm that has 280,000 shares of stock outstanding.The company is in the process of borrowing $2.4 million at 5.5 percent interest to repurchase 75,000 shares of the outstanding stock.What is the value of this firm if you ignore taxes?

A) $8,960,000
B) $9,240,000
C) $10,710,000
D) $12,500,000
E) $11,360,000