Question
DEF Ltd is considering two different financing plans. 1. Under plan I the interest would be 8% on $100,000 face value bonds. 2. Under plan
DEF Ltd is considering two different financing plans.
1. Under plan I the interest would be 8% on $100,000 face value bonds.
2. Under plan II the interest would be $10,125 with 1,400 shares of common stock outstanding.
If the indifference point is $25,000 and the tax rate is 30%, how many shares of common stock are outstanding for plan I?
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Financial and Management Accounting
Authors: Pauline Weetman
7th edition
1292086599, 978-1292086590
