Beranek Corp has $855,000 of assets (which equal total invested capital) ,and it uses no debt-it is financed only with common equity.The new CFO wants to employ enough debt to raise the total debt to total capital ratio to 40%,using the proceeds from borrowing to buy back common stock at its book value.How much must the firm borrow to achieve the target debt ratio?
A) $287,280
B) $342,000
C) $318,060
D) $403,560
E) $277,020
Correct Answer:
Verified
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