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The resulting bankruptcy made him extremely averse to debt financing As a result, the company is entirely equity financed, with 12 million shares of common

The resulting bankruptcy made him extremely averse to debt financing As a result, the company is entirely equity financed, with 12 million shares of common stock outstanding The stock currently trades at $4850 per share Stephenson is evaluating a plan to purchase a huge tract of

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Solution a If Stephenson wishes to maximize the overall value of the firm it should use debt to finance the 100 million purchase Since interest payments are tax deductible debt in the firms capital st... blur-text-image
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