Use the Information for the Question(s)below

question 22

Multiple Choice

Use the information for the question(s) below.
Consider two firms,With and Without,that have identical assets that generate identical cash flows.Without is an all-equity firm,with 1 million shares outstanding that trade for a price of $24 per share.With has 2 million shares outstanding and $12 million in debt at an interest rate of 5%.
-Assume that MM's perfect capital market conditions are met and that you can borrow and lend at the same 5% rate as With.You have $5000 of your own money to invest and you plan on buying With stock.Using homemade (un) leverage you invest enough at the risk-free rate so that the payoff of your account will be the same as a $5000 investment in Without stock? The number of shares of With stock you purchased is closest to:

• A)100.
• B)425.
• C)1650.
• D)825.

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Definitions:

Stress-Related Hormones

Bodily chemicals that are produced in response to stress, influencing health and emotional state.

Heart Rate

The number of heartbeats per unit of time, usually expressed in beats per minute (bpm), indicating the heart's activity level and overall health.

Self-Determination

The process by which a person controls their own life, making choices and decisions based on personal preferences and interests.

Resilience

The capacity to recover quickly from difficulties; toughness.