How many shares of stock remain once debt is issued
Northwestern Lumber Products currently has 15,000 shares of stock outstanding. Patricia, the financial manager, is considering issuing $120,000 of debt at an interest rate of 6.75 percent. Given this, how many shares of stock will be outstanding once the debt is issued if the break-even level of EBIT between these two capital structure options is $60,000? Ignore taxes.
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Analysis
Issuing the $120,000 of debt at an interest rate of 6.75% doesn't affect Northwestern Lumber Products' outstanding common ...
Solution Summary
The expert determines how many shares of stock remain once debt is issued.
$2.19