Use the Information for the Question(s)below

question 58

Multiple Choice

Use the information for the question(s) below.
You own your own firm and you need to raise $50 million to fund an expansion.Following the expansion,your firm will be worth $75 million in its unlevered form.You want to go ahead with the expansion,but you are concerned that you may not be able to maintain ownership of over 50% of your firm's equity.In other words,you are concerned that if you use equity to finance the expansion,you may lose control of your firm.
-Assume that capital markets are perfect,you issue $25 million in new debt,and you issue $25 million in new equity.Your ownership stake in the firm following these new issues of debt and equity is closest to:

• A)50%.
• B)55%.
• C)58%.
• D)33%.

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Definitions:

Sexual Attitudes

The beliefs, values, and feelings people have about sexuality that influence their sexual behavior.

Social Class

Divisions within society based on social and economic status, affecting individuals' opportunities and access to resources.

Gay Parents

Refers to parents who identify as homosexual, emphasizing the diverse structures and dynamics of family units.

Lesbian Parents

Female couples who raise children together in a family structure.