GFC’s balance sheet shows a total of $25 million long-term
debt with a coupon rate of 8.50%. The yield to maturity on this
debt is 8.00%, and the debt has a total current market value of $27
million. The company has 10 million shares of stock, and the stock
has a book value per share of $5.00. The current stock price is
$20.00 per share, and stockholders' required rate of return,
rs, is 12.25%. The company recently decided that its...