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shtirl [24]
2 years ago
7

Nouvelle-Aquitaine Railroad is comparing two separate capital structures. The first structure consists of 405,000 shares of stoc

k and no debt. The second structure consists of 252397 shares of stock and $1.82 million of debt. What is the price per share of equity?
a. $75.56.
b. $88.76.
c. $82.42.
d. $72.12.
e. $93.20.
Business
1 answer:
matrenka [14]2 years ago
7 0

Answer:

$11.93

Explanation:

Calculation to determine the price per share of equity

Using this formula

Price per share of equity = Debt under Plan II / (Number of shares under Plan I - Number of shares under Plan II)

Let plug in the formula

Price per share of equity= $1,820,000 / (405,000 - 252,397)

Price per share = $1,820,000 / 152,603

Price per share = $11.93

Therefore the price per share of equity is $11.93

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Read 2 more answers
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8 0
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Answer:

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