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Agata [3.3K]
3 years ago
8

Honeycutt Co. is comparing two different capital structures. Plan I would result in 12,700 shares of stock and $109,250 in debt.

Plan II would result in 9,800 shares of stock and $247,000 in debt. The interest rate on the debt is 10 percent. The all-equity plan would result in 15,000 shares of stock outstanding. Ignore taxes for this problem. a. What is the price per share of equity under Plan I
Business
1 answer:
irina [24]3 years ago
5 0

Answer: $47.50

Explanation:

The Price per share under Plan I can be calculated by the formula;

Price per share = Value of debt / (Number of shares under all-equity plan - Number of shares under Plan)

= 109,250 / ( 15,000 - 12,700)

= 109,250 / 2,300

= $47.50

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a) true

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On july 7, smithview bank lent $430,000 to andrews retail shop on a 90 day, 6% note. what is the maturity date of the note?
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