Kolby Corp. is comparing two different capital structures. Plan I would result in 11,000 shares of stock
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Question:
Kolby Corp. is comparing two different capital structures. Plan I would result in 11,000 shares of stock and $80,000 in debt. Plan II would result in 8,375 shares of stock and $150,000 in debt. The interest rate on the debt is 6 percent. Assume that EBIT will be $60,000. An all-equity plan would result in 14,000 shares of stock outstanding. Ignore taxes. |
What is the price per share of equity under Plan I? Plan II? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
Price per share of equity | |
Plan I | $ per share |
Plan II | $ per share |
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