Now Assume That AJC Is Considering Changing from Its Original

question 68

Multiple Choice

Now assume that AJC is considering changing from its original capital structure to a new capital structure that results in a stock price of $64 per share. The resulting capital structure would have a $336,000 total market value of equity and a $504,000 market value of debt. How many shares would AJC repurchase in the recapitalization?

• A) 4,250
• B) 4,500
• C) 4,750
• D) 5,000
• E) 5,250

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Definitions:

Traveler's Checks

A type of check especially designed for travelers to use as a form of payment, which offers the security against loss or theft by requiring signatures for cashing.

Coins

Pieces of metal that are officially minted and used as money in financial transactions.

Public

The general populace or the community at large, often used in the context of government, policy, or matters of state.

M1

A category of the money supply that includes all physical money, such as coins and currency, as well as demand deposits and other liquid assets held by the central bank.