Question
Consider two firms, A and B, that have identical assets that generate identical cash flows. is an B all-equity firm, with 1 million shares outstanding
Consider two firms, A and B, that have identical assets that generate identical cash flows. is an B all-equity firm, with 1 million shares outstanding that trade for a price of $20 per share. A has 1 million shares outstanding and $10 million dollars in debt at an interest rate of 5%. According to MM Proposition 1, the stock price for A is closest to:
A. $8.00 B. $24.00 C. $6.00 D. $10.00
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Real Estate Finance Theory And Practice
Authors: Terrence M. Clauretie, G. Stacy Sirmans
5th Edition
0324305508, 9780324305500
