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his Question: 1 pt 26of40(27 complete) This Test: 40 pts possible Use the information for the question(s) below Consider two firms, Firm X and Firm

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his Question: 1 pt 26of40(27 complete) This Test: 40 pts possible Use the information for the question(s) below Consider two firms, Firm X and Firm Y, that have identical assets that generate identical cash flows. Firm Y is an all-equity firm, with 1 million shares outstanding that trade for a price of $24 per share. Firm X has 2 million shares outstanding and $12 million in debt at an interest rate of 5%. Assume that MM's perfect capital markets conditions are met and that you can borrow and lend at the same 5% rate as Firm You have $5,000 of your own money to invest and you plan on buying Firm Y stock. Using homemade leverage you borrOw enough in your margin account so that the payoff of your margined purchase of Firm Y stock will be the same as a $5,000 investment in Firm X stock. The number of shares of Firm Y stock you purchased is closest to O A. 2.000 FdB. 1.650 O C. 825 O D. 425 Click to select your answer ert hort sc delete home end p pe dn 9 lock 9 09 up 8

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