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Tree Farms currently has 48,000 shares of stock outstanding and no debt. The price per share is $22.50. The firm is considering borrowing funds at

Tree Farms currently has 48,000 shares of stock outstanding and no debt. The price per share is $22.50. The firm is considering borrowing funds at 8.5 percent interest and using the proceeds to repurchase 1,750 shares of stock. Ignore taxes. How much is the firm borrowing? (Hint: you need to determine the value of the 1,750 shares of stock.) A. $42,500 B. $39,375 C. $32,750 D. $32,500 E. $40,000

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