Taxes and rolston corporation

Reference no: EM13181475

Rolston Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Rolston would have 190,000 shares of stock outstanding. Under Plan II, there would be 140,000 shares of stock outstanding and $2.80 million in debt outstanding. The interest rate on the debt is 6 percent and there are no taxes.

Reference no: EM13181475

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