Jessica Invested in QRT Stock When the Company Was Unlevered

question 22

Multiple Choice

Jessica invested in QRT stock when the company was unlevered. Since then, QRT has changed its capital structure and now has a debt-equity ratio of .36. To unlever her position, Jessica needs to:

• A) borrow some money and purchase additional shares of QRT stock.
• B) maintain her current equity position as the debt of the firm does not affect her personally.
• C) sell 36 percent of her shares of QRT stock and hold the proceeds in cash.
• D) sell 36 percent of her shares of QRT stock and loan out the sale proceeds.
• E) create a personal debt-equity ratio of .36.

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An approach that focuses on completing tasks sequentially rather than all at once, promoting manageability and focus.

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