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1) Youcurrentlyown500sharesinK&SStores.K&Siscurrentlyanallequityfirmthat has25,000sharesofstockoutstandingatamarketpriceof$10ashare.Thecompany's earningsbeforeinterestandtaxesare$20,000.K&Shasdecidedtoissue$150,000ofdebtat a6%rateofinterest.This$150,000willbeusedtorepurchasesharesofstock.Howmany sharesofK&Sstockmustyouselltounleveryourpositionifyoucanlendoutfundsata6% rateofinterest? A.150shares B.200shares C.250shares D. 300shares E.500shares
1) Youcurrentlyown500sharesinK&SStores.K&Siscurrentlyanallequityfirmthat
has25,000sharesofstockoutstandingatamarketpriceof$10ashare.Thecompany's
earningsbeforeinterestandtaxesare$20,000.K&Shasdecidedtoissue$150,000ofdebtat
a6%rateofinterest.This$150,000willbeusedtorepurchasesharesofstock.Howmany
sharesofK&Sstockmustyouselltounleveryourpositionifyoucanlendoutfundsata6%
rateofinterest?
A.150shares
B.200shares
C.250shares
D.300shares
E.500shares
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