Question
Flour Mills is a fully-capital company with a total market value of $891,860. The company has 38,000 shares outstanding. Management is considering issuing $275,000 of
Flour Mills is a fully-capital company with a total market value of $891,860. The company has 38,000 shares outstanding. Management is considering issuing $275,000 of debt at an interest rate of 7.5 percent and using the proceeds on a share buyback. Ignore taxes. How many shares can the company buy back if it issues the debt securities? (Round the number of shares repurchased to the nearest whole share.)
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