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Taunton's is an all-equity firm that has 155,500 shares of stock outstanding. The CFO is considering...

Taunton's is an all-equity firm that has 155,500 shares of stock outstanding. The CFO is considering borrowing $287,000 at 7 percent interest to repurchase 24,500 shares. Ignoring taxes, what is the value of the firm?

a- 1,821,571

b- 1,908,313

c- 2,081,796

d-2,241,934

e- 2,354,031

Gulf Shores Inn is comparing two separate capital structures. The first structure consists of 330,000 shares of stock and no debt. The second structure consists of 288,000 shares of stock and $2.02 million of debt. What is the price per share of equity?

a-48.10

b- 54.97

c-50.39

d-59.19

e-62.15

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