VanMannen Foundations, Inc. (VF) VanMannen Foundations, Inc. (VF) is a zero-growth company that currently has zero debt, and it has the data shown below.

EBIT =	$80,000
Growth =	0%
Orig cost of equity, rs =	10.0%
No. of shares =	10,000
Price per share =	$60.00
Tax rate =	25%

Refer to the data for VanMannen Foundations, Inc. (VF). Now assume that VF is considering changing from its original zero debt capital structure to a new capital structure with even more debt. This results in changes in the cost of debt and equity, and thus to a new WACC and a new value of operations. Assume VF raises the amount of new debt indicated below and uses the funds to purchase and hold T-bills until it makes the stock repurchase. What is the stock price per share immediately after issuing the debt but prior to the repurchase?

Debt/Value =	40%		Value of new debt =	$280,702
Equity/Value =	60%		New WACC =	8.55%

a. $70.18

b. $81.24

c. $66.67

d. $73.68

e. $77.37