(The Following Data Apply to Problems 66, 67, and 68

question 57

Multiple Choice

(The following data apply to Problems 66, 67, and 68. The problems MUST be kept together, and they cannot be changed algorithmically.)
Barnes Baskets, Inc. (BB) currently has zero debt. Its earnings before interest and taxes (EBIT) are $100,000, and it is a zero growth company. BB's current cost of equity is 13%, and its tax rate is 40%. The firm has 20,000 shares of common stock outstanding selling at a price per share of $23.08.
-Now 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. What is the stock price per share immediately after issuing the debt but prior to the repurchase?

• A) $14.42
• B) $19.36
• C) $23.91
• D) $28.85
• E) $35.62

Analyze legal strategies towards challenging racial segregation and discrimination.

Grasp the significance of specific legal cases in advancing civil rights.

Understand the pivotal sociopolitical shifts and coalitions in postwar America relating to civil rights and labor movements.

Understand the key tactics and strategies employed by Thurgood Marshall and Charles Hamilton Houston in their legal fight against Jim Crow laws.

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Definitions:

Gross Margin

The difference between revenue and the cost of goods sold, divided by revenue, expressed as a percentage. It shows the percentage of revenue that exceeds the cost of goods sold.

Consolidated Inventory

involves aggregating the inventories of a parent company and its subsidiaries, presenting them as a single inventory balance in the consolidated financial statements.

Outstanding Shares

The total number of shares of a corporation that are currently owned by all its shareholders, including shares held by institutional investors and restricted shares.

Straight-Line Method

A method of calculating depreciation of an asset by evenly distributing its cost over its useful life.