Use the Information for the Question(s)below

question 26

Multiple Choice

Use the information for the question(s) below.
You own your own firm and you need to raise $50 million to fund an expansion.Following the expansion,your firm will be worth $75 million in its unlevered form.You want to go ahead with the expansion,but you are concerned that you may not be able to maintain ownership of over 50% of your firm's equity.In other words,you are concerned that if you use equity to finance the expansion,you may lose control of your firm.
-Assume that capital markets are perfect,you issue $30 million in new debt,and you issue $20 million in new equity.Your ownership stake in the firm following these new issues of debt and equity is closest to:

• A)58%.
• B)50%.
• C)33%.
• D)55%.

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Definitions:

Culture Wars

Conflicts between cultural groups or ideologies, often regarding values, beliefs, and societal norms.

Hegemony

The dominance of one group over others, often exercised through a combination of political, economic, and cultural means.

Symbolic Culture

The aspect of culture that includes nonmaterial cultural elements such as symbols, language, norms, and values that represent the ideas and beliefs of a society.

Counterculture

A counterculture refers to a cultural group or movement that rejects or challenges the dominant societal values and norms.