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Suppose that a company's equity is currently selling for $42.50 per share and that there are 2.0 million shares outstanding and 30 thousand bonds outstanding,
Suppose that a company's equity is currently selling for $42.50 per share and that there are 2.0 million shares outstanding and 30 thousand bonds outstanding, which are selling at 112.00 percent of par. If the firm was considering an active change to their capital structure so that the firm would have a D/E of 1.5, which type of security (stocks or bonds) would they need to sell to accomplish this, and how much would they have to sell? (
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