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This is the first part 14. Suppose the firm scraps the plan to recapitalize and stays all-equity. Bobby, a shareholder of ABC who owns 1,000

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14. Suppose the firm scraps the plan to recapitalize and stays all-equity. Bobby, a shareholder of ABC who owns 1,000 shares, prefers the cash flows that he would have received under the proposed capital structure. What strategy should he use to replicate his desired cash flows? A) He should borrow $6,000 and buy 600 shares B) He should sell 600 shares and put the money in the bank. C) He should borrow $15,000 and buy 1,500 shares. D) He should borrow $6,666.67 and buy 666.67 shares. E) He should sell 400 shares and put the money in the bank. price a market at outstanding stock of BC Co of $10 per share. The a 6% rate m e company's EBIT is $20,000. The company is thinking of issuing $150.000 of debt at st and using the proceeds to repurchase shares of stock. It is a perfect capital market an all-equity firm that has 25,000 shares ur is 3. What would be the EPS of the firm under the proposed capital structure A) $1.10 B) $0.50 C) -$5.20 D) $0.80 E) There is not enough information to

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