Assume That BB Is Considering Changing from Its Original Capital

question 9

Multiple Choice

assume that BB is considering changing from its original capital structure to a new capital structure with 45% debt and 55% equity.This results in a weighted average cost of capital equal to 10.4% and a new value of operations of $576,923.Assume BB raises $259,615 in new debt and purchases T-bills to hold until it makes the stock repurchase.BB 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)11,001; $28.85
• B)12,711; $35.62
• C)13,901; $42.57
• D)15,220; $54.31
• E)17,105; $89.67

---

Definitions:

Obsessions

Persistent, unwanted thoughts, images, or urges that cause distress and anxiety.

Panic Attacks

Sudden episodes of intense fear or acute discomfort, accompanied by physical and mental symptoms that may include palpitations, sweating, and feelings of doom.

Antidepressant Drugs

Medications designed to alleviate symptoms of depression by adjusting the chemical balance in the brain.

Obsessive-compulsive Disorder

A mental disorder characterized by unwanted and intrusive thoughts (obsessions) and repetitive behaviors or mental acts (compulsions) that an individual feels driven to perform.