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Aptech Corp. expects to generate future free cash flow of $50 million in the first year and a 5% growth rate in perpetuity. The firm

Aptech Corp. expects to generate future free cash flow of $50 million in the first year and a 5% growth rate in perpetuity. The firm currently has $50 million in excess cash. The WACC of Aptech Corp. is 10%. The shares outstanding is 10 million. Aptech Corp is planning to issue $200 million debt and pay all the proceed($200 million) from debt issuance as dividends to shareholders. If the tax rate is 20%, what is the stock price after the announcement? A. 120. B. 105. C. 109. D. 115

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