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> Question 8 5 pts Arizona Coffee, Inc. is an all-equity firm, and has just announced that it will raise $6 million perpetual debt to
> Question 8 5 pts Arizona Coffee, Inc. is an all-equity firm, and has just announced that it will raise $6 million perpetual debt to repurchase some of its shares (in about a month's time). Suppose the firm currently has 800,000 shares outstanding, and that its shares were trading at $15/share before the announcement. Further assume that the marginal corporate tax rate is 30% and that it is highly unlikely that Arizona Coffee will become financially distressed after raising $6 million in debt (i.e. PV of financial distress costs is approximately zero). How many shares will Arizona Coffee Inc., repurchase (in about a month's time)? 324,115 Shares 347,826 shares 372,413 shares 400,000 shares 439,216 shares
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