Multiple Choice
Simpson's is an all equity firm that has 400,000 shares of stock outstanding.The company is in the process of borrowing $1.2 million at 8 percent interest to repurchase 50,000 shares of the firm's outstanding stock.What is the value of this firm if you ignore taxes?
A) $8.4 million
B) $9.2 million
C) $9.6 million
D) $9.8 million
E) $8.9 million
Correct Answer:
Verified
Correct Answer:
Verified
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