Charleston Mills is an all-equity firm with a total market value of $221,000. The firm has 8,000 shares of stock outstanding. Management is considering issuing $50,000 of debt at an interest rate of 7 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares can the firm repurchase if the is issues the debt securities? A- 1,810 shares B- 1,818 shares C- 1,847 shares D- 1,856 shares E-1,899 shares

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter14: Distributions To Shareholders: Dividends And Repurchases
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Charleston Mills is an all-equity firm with a total market value of $221,000. The firm has 8,000 shares of stock outstanding. Management is considering issuing $50,000 of debt at an interest rate of 7 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares can the firm repurchase if the is issues the debt securities?

A- 1,810 shares
B- 1,818 shares
C- 1,847 shares
D- 1,856 shares
E-1,899 shares
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