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13. Suppose that the common shares of Oceanic Luxury Vessels, Inc., is trading for $38 a share and that 5 million shares are outstanding. The
13. Suppose that the common shares of Oceanic Luxury Vessels, Inc., is trading for $38 a share and that 5 million shares are outstanding. The company also has 75,000 bonds outstanding, which are selling at 102 percent of par. If Oceanic Luxury Vesseis, Inc, was considering an active change to its capital structure so that the rm would have a DIE ratio of 1.6, which type of security (stocks or bonds) would it need to sell to accomplish this, and how much would it have to sell? A. Debt; $221.5 million B. Stock: $445 .2 million C. Stock; $289.4 million 1). Debt; $248.5 million
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