Either selling stock or issuing debt at an interest rate

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Mary owns a floral and gift shop valued at $150,000. If she keeps the shop open 5 days a week, EBIT is $75,000. If the shop remains open 6 days a week EBIT increases to $92,000 annually. Mary needs an additional $50,000 which she can raise by either selling stock or issuing debt at an interest rate of 7 percent. Ignore taxes. What will the cash flow for the year be to Mary if she issues stock and remains open 6 days a week?

Reference no: EM131054706

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