Question
Suppose Pestco, Inc., a profitable pest management firm, has 625 million shares outstanding with a share price of $80, and $25 billion in debt. If
Suppose Pestco, Inc., a profitable pest management firm, has 625 million shares outstanding with a share price of $80, and $25 billion in debt. If in three years, Pestco has 800 million shares outstanding trading for $100 per share, how much debt will Pestco have if it maintains a constant debt-equity ratio (D/E)?
| a. | $40 billion | |
| b. | $4 billion | |
| c. | $160 billion | |
| d. | $20 billion |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cases In Financial Reporting
Authors: Ellen Engel, D. Eric Hirst, Mary Lea McAnally
8th Edition
1618531220, 9781618531223
