Question: please answer these 2 multiple questions 29. Adam is an all-equity firm with 50 million shares outstanding, which are currently trading at $10 per share.

please answer these 2 multiple questions

29. Adam is an all-equity firm with 50 million shares outstanding, which are currently trading at $10 per share. Last month, Adam announced that it will change its capital structure by issuing $200 million in debt to repurchase existing shares of stock. Assume that capital markets are perfect. At the conclusion of this transaction, the number of shares that Adam will repurchase is closest to:

A. 5 million

B. 15 million

C. 20 million

D. 40 million

30. Consider two firms, A and B, that have identical assets that generate identical cash flows. is an B all-equity firm, with 1 million shares outstanding that trade for a price of $20 per share. A has 1 million shares outstanding and $10 million dollars in debt at an interest rate of 5%. According to MM Proposition 1, the stock price for A is closest to:

A. $8.00

B. $24.00

C. $6.00

D. $10.00

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