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[Q: 16-2771996] MM Prop I (wlout taxes). Your firm is comparing two different capital structures. Under Plan I, your firm would have 22,500 shares of
[Q: 16-2771996] MM Prop I (wlout taxes). Your firm is comparing two different capital structures. Under Plan I, your firm would have 22,500 shares of stock outstanding and 1,000 perpetual bonds outstanding. Under Plan II, there would be 12,500 shares of stock outstanding and 3,000 perpetual bonds outstanding. The perpetual bonds have a par value of $2000, pay semiannual coupons of $33.27, and have a yield to maturity of 10%, compounded semiannually. Assume there are no taxes. According to MM Prop I, what is this firm's stock price? A. \$141.06 per share B. $122.43 per share C. $127.76 per share D. $135.74 per share E. $133.08 per share
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