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Business, 19.12.2019 01:31 drcarver

Bruno's is considering changing from its current all-equity capital structure to 30 percent debt. there are currently 7,500 shares outstanding at a price per share of $39. ebit is expected to remain constant at $23,000. the interest rate on new debt is 7.5 percent and there are no taxes. tracie owns $12,675 worth of stock in the company. the firm has a 100 percent payout. what would tracie's cash flow be under the new capital structure assuming that she keeps all of her shares?
a. $998
b. $1,109
c. $1,115
d. $1,037
e. $1,016

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