Assume That PP Is Considering Changing from Its Original Capital

question 56

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.PP then sells the T-bills and uses the proceeds to repurchase stock.How many shares remain after the repurchase, and what is the stock price per share immediately after the repurchase?

• A)7,500; $71.49
• B)7,000; $59.57
• C)6,500; $51.06
• D)6,649; $53.33
• E)6,959; $58.78

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Definitions:

Customerization

A blend of customization and standardization in marketing, where businesses adapt their products or services to individual customer needs while maintaining efficiency.

Customizing Product

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The engagement and exchanges between customers and retailers during the shopping experience, including physical and online shopping.

Digital Capabilities

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