Refer to Exhibit 15

question 37

Multiple Choice

Refer to Exhibit 15.1.PP is considering changing its capital structure to one with 30% debt and 70% equity, based on market values.The debt would have an interest rate of 8%.The new funds would be used to repurchase stock.It is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%.If this plan were carried out, what would be PP's new value of operations?

• A) $484, 359
• B) $487, 805
• C) $521, 173
• D) $560, 748
• E) $584, 653

---

Definitions:

Girls and Boys

Descriptive terms for female and male children, respectively, often used to denote differences in behavior, socialization, or biological aspects.

Math and Science

Academic disciplines focused on understanding numbers, forms, functions, and the natural world through observation and experiment.

Teachers

Educators responsible for facilitating learning, imparting knowledge, and fostering academic and social development in students.

Parents

Caregivers of offspring in their own species; in humans, they typically provide support, education, love, and guidance to their children.