Suppose that Lil John Industries’ equity is currently selling
for $29 per share and that 2.2 million shares are outstanding. The
firm also has 52,000 bonds outstanding, which are selling at 104
percent of par. Assume Lil John was considering an active change to
its capital structure so that the firm would have a (D/E) of
1.3.
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How much would the firm have to sell? (In dollars) |
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