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Southwest Sands currently has 25,500 shares of stock outstanding. It is considering issuing $149,000 of debt...

Southwest Sands currently has 25,500 shares of stock outstanding. It is considering issuing $149,000 of debt at an interest rate of 8.0 percent. The break-even level of EBIT between these two capital structure options is $81,000. How many shares of stock will be repurchased if the company undergoes the recapitalization? Ignore taxes.

Multiple Choice

3,216.51 shares

3,752.59 shares

2,948.47 shares

3,564.96 shares

4,065.31 shares

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Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 10 months ago
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