Beranek Corp

question 100

Multiple Choice

Beranek Corp.has $410,000 of assets,and it uses no debt-it is financed only with common equity.The new CFO wants to employ enough debt to bring the debt/assets ratio to 40%,using the proceeds from the borrowing to buy back common stock at its book value.How much must the firm borrow to achieve the target debt ratio?

• A)$155,800
• B)$164,000
• C)$172,200
• D)$180,810

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