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Richard Co. is a zero growth company. It currently has zero debt and its earnings before...

Richard Co. is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $80,000. CSUSM 's current cost of equity is 10%, and its tax rate is 40%. The firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00.

Refer to Exhibit 16.1. Assume that Richard Co. is considering changing from its original capital structure to a new capital structure with 35% debt and 65% equity.This results in a weighted average cost of capital equal to 9.4%and a new value of operations of $510,638. Assume Richard Co. raises $178,723 in new debt and purchases T-bills to hold until it makes the stock repurchase. What is the stock price per share immediately after issuing the debt but prior to the repurchase?

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