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25. You currently own 600 shares of JKL, Inc. JKL is an all equity firm that has 75,000 shares of stock outstanding at a market

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25. You currently own 600 shares of JKL, Inc. JKL is an all equity firm that has 75,000 shares of stock outstanding at a market price of $40 a share. The company's earnings before interest and taxes are $140,000. JKL has decided to issue $1 million of debt at 8 percent interest. This debt will be used to repurchase shares of stock. If you prefer the original capital structure of 100% equity and the associated payoffs, you will take which of the following actions to achieve the original payoffs? (5 points) A. Borrow $16,000 at 8% to purchase another 200 shares B. Borrow $16,000 at 8% to purchase another 400 shares C. Sell 400 shares and loan out the proceeds at 8% D. Sell 200 shares and loan out the proceeds at 8% E. Borrow $16,000 at 8% to purchase another 600 shares

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