Question: Dar, Inc is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would

Dar, Inc is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 195, 000 shares of stock outstanding. Under Plan II, there would be 140, 000 shares of stock outstanding and $1,787,500 in debt outstanding. The interest rate on the debt is 8%, and there are no taxes. What is the price per share of equity (Note: the share price is the same under Plan I and Plan II)?

	A.	$45.50
	B.	$56.60
	C.	$32.50
	D.	$21.60

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