Brunos is considering changing from its current all-equity, Ask an Expert

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Bruno's is considering changing from its current all-equity capital structure to 30 percent debt. There are currently 7,500 shares outstanding at a price per share of $39. EBIT is expected to remain constant at $23,000. The interest rate on new debt is 7.5 percent and there are no taxes. Tracie owns $12,675 worth of stock in the company. The firm has a 100 percent payout. What would Tracie's cash flow be under the new capital structure assuming that she keeps all of her shares?

$998

$1,109

$1,115

$1,037

$1,016

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92095443

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