VanMannen Foundations, Inc ​
-Refer to the Data for VanMannen Foundations, Inc

question 82

Multiple Choice

VanMannen Foundations, Inc.(VF)
VanMannen Foundations, Inc.(VF) is a zero-growth company that currently has zero debt, and it has the data shown below.
$\begin{array}{lr}\text { EBIT }= & \$ 80,000 \\\text { Growth }= & 0 \% \\\text { Orig cost of equity, } \mathrm{r}_{\mathrm{s}}= & 10.0 \% \\\text { No. of shares }= & 10,000 \\\text { Price per share } & \$ 60.00 \\\text { Tax rate }= & 25 \%\end{array}$ ​
-Refer to the data for VanMannen Foundations, Inc.(VF) .What would the stock price be if VF issued the new debt and immediately used the proceeds to repurchase stock?

• A) $65.04
• B) $66.71
• C) $68.42
• D) $70.18
• E) $73.68

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Definitions:

Cranial Cavity

The space within the skull that houses the brain, part of the dorsal body cavity.

Vertebral Canal

The cylindrical space within the vertebral column that houses and protects the spinal cord.

Lateral

Positioned on or directed towards the side; relating to the sides of an organism or structure.

Midline

An imaginary line drawn vertically through the middle of the body, dividing it into right and left halves.