Thompson & Thomson Is an All Equity Firm That Has

question 82

Multiple Choice

Thompson & Thomson is an all equity firm that has 500,000 shares of stock outstanding.The company is in the process of borrowing $10 million at 9% interest to repurchase 200,000 shares of the outstanding stock.What is the value of this firm if you ignore taxes?

• A)$23.0 million
• B)$24.8 million
• C)$25.0 million
• D)$26.2 million
• E)$27.3 million

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