Refer to Exhibit 15

question 2

Multiple Choice

Refer to Exhibit 15.2.Now assume that VF is considering changing from its original zero debt capital structure to a new capital structure with even more debt.This results in changes in the cost of debt and equity, and thus to a new WACC and a new value of operations.Assume VF raises the amount of new debt indicated below and uses the funds to purchase and hold T-bills until it makes the stock repurchase.What is the stock price per share immediately after issuing the debt but prior to the repurchase?

• A) $50.67
• B) $53.33
• C) $56.00
• D) $58.80
• E) $61.74

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Definitions:

Sales Promotion

Short-term incentives or activities aimed at encouraging the purchase or sale of a product or service.

Direct Marketing

A form of advertising where businesses communicate directly with customers through various media.

Promotional Mix

The combination of different marketing approaches, including advertising, sales promotion, personal selling, public relations, and direct marketing, used to achieve business goals.

Nonpaid Marketing

Strategies to promote a business or product without direct financial expenditure, relying on word-of-mouth, organic social media presence, etc.