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please solve it in 20 mins I will thumb you up QUESTION 8 Lennon & McCartney Co is comparing two different capital structures: An all
please solve it in 20 mins I will thumb you up
QUESTION 8 Lennon & McCartney Co is comparing two different capital structures: An all equity plan (Plan 1) and a levered plan (Plan 2). Under Plan 1, the company would have 200,000 shares of stock outstanding. Under Plan 2, there would be 130,000 shares of stock outstanding and $2.925 million in debt outstanding. The interest rate on the debt is 8%, and there are no taxes. What is the current share price? a. $38.50 O b. $41.8 c. $53.89 O d. $27.5 QUESTION 9 Using the information in (8), what is the ratio of the value of the firms comparing Plan 1 to Plan 2? O a. 1 O b. 1.1 O c. 1.08 O d.2.1Step by Step Solution
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