Refer to Exhibit 15

Refer to Exhibit 15.3.Now assume that BB is considering changing from its original capital structure to a new capital structure with 45% debt and 55% equity.This results in a weighted average cost of capital equal to 10.4% and a new value of operations of $576, 923.Assume BB raises $259, 615 in new debt and purchases T-bills to hold until it makes the stock repurchase.BB then sells the T-bills and uses the proceeds to repurchase stock.How many shares remain after the repurchase, and what is the stock price per share immediately after the repurchase?

A) 11, 001; $28.85
B) 12, 711; $35.62
C) 13, 901; $42.57
D) 15, 220; $54.31
E) 17, 105; $89.67

Correct Answer:

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