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OOke Co. is comparing two different capital structures. Plan I would result in 8,500 shares of stock and $402,500 in debt. Plan II would result in 12,000 shares of stock and $280,000 in debt. The interest rate on the debt is 11 percent. The all-equity plan would result in 20,000 shares of stock outstanding. Ignore taxes for this problem.

Required:

(a) What is the price per share of equity under Plan I?

Price per share $

(b) What is the price per share of equity under Plan II?

Price per share $

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91621017

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