Thompson & Thomson is an all equity firm that has 500,000 shares of stock outstanding. The company is in the process of borrowing $8 million at 9% interest to repurchase 200,000 shares of
The outstanding stock. What is the value of this firm if you ignore taxes?
A) $20.0 million
B) $20.8 million
C) $21.0 million
D) $21.2 million
E) $21.3 million
Correct Answer:
Verified
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