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River Cruises is all - equity - financed with 1 0 0 , 0 0 0 shares. It now proposes to issue $ 1 9

River Cruises is all-equity-financed with 100,000 shares. It now proposes to issue $190,000 of debt at an interest rate of 10% and use
the proceeds to repurchase 19,000 shares at $10 per share. Profits before interest are expected to be $119,000.

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