Leverage and share value, ABC plc is comparing two

Leverage and share value

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Reference no: EM132071441

Leverage and Share Value

ABC plc is comparing two different capital structures. Plan I would result in 1,100 shares of stock and €16,500 in debt. Plan II would result in 900 shares of stock and €27,500 in debt, on which it would pay interest of 8 per cent. What is the price per share of equity under Plan I? Plan II? What principle is illustrated by your answers ?

Reference no: EM132071441

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