VanMannen Foundations, Inc. (VF)VanMannen Foundations, Inc. (VF) is a zero-growth company that currently has zero debt, and it has the data shown below.
EBIT =$80,000
Growth =0%
Orig cost of equity, rs =10.0%
No. of shares =10,000 Price per share = $60.00Tax rate =25%
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Refer to the data for VanMannen Foundations, Inc. (VF). What would the stock price be if VF issued the new debt and immediately used the proceeds to repurchase stock?
A. $65.04
B. $66.71
C. $68.42
D. $70.18
E. $73.68
Answer: D
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