Question
Ms. Kraft owns 130,000 shares of the common stock of Copperhead Corporation with a market value of $18 per share, or $2,340,000 overall. The company
Ms. Kraft owns 130,000 shares of the common stock of Copperhead Corporation with a market value of $18 per share, or $2,340,000 overall. The company is currently financed as follows:
Market Value | |
Common stock (8 million shares) | $432 million |
Short-term loans | $ 2 million |
Copperhead now announces that it is replacing $1 million of short-term debt with an issue of common stock. What action can Ms. Kraft take to ensure that she is entitled to exactly the same proportion of profits as before?
What percent of the firm does Ms. Kraft currently own? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places.)
Ownership percentage %
Complete this sentence: (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Ms. Kraft should (Click to select)borrowlend $ and (Click to select)buysell that much of Copperhead stock.
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