Assume That PP Is Considering Changing from Its Original Capital

question 42

Multiple Choice

assume that PP is considering changing from its original capital structure to a new capital structure with 35% debt and 65% equity.This results in a weighted average cost of capital equal to 9.4% and a new value of operations of $510,638.Assume PP raises $178,723 in new debt and purchases T-bills to hold until it makes the stock repurchase.What is the stock price per share immediately after issuing the debt but prior to the repurchase?

• A)$45.90
• B)$48.12
• C)$51.06
• D)$53.33
• E)$58.75

Analyze the impact of inventory errors on financial statements.

Apply the straight-line method of depreciation and correct errors associated with asset depreciation.

Identify the effects of changes in accounting principles and estimate changes on financial statements.

Compute corrected net income after adjusting for accounting errors.

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