Question: VanMannen Foundations, Inc. (VF) VanMannen Foundations, Inc. (VF) is a zero-growth company that currently has zero debt, and it has the data shown below. EBIT

VanMannen Foundations, Inc. (VF) VanMannen Foundations, Inc. (VF) is a zero-growth company that currently has zero debt, and it has the data shown below.

EBIT = $80,000

Growth = 0%

Orig cost of equity, rs = 10.0%

No. of shares = 10,000

Price per share = $60.00

Tax rate = 25%

Refer to the data for VanMannen Foundations, Inc. (VF). What would the stock price be if VF issued the new debt and immediately used the proceeds to repurchase stock?

a. $70.18

b. $68.42

c. $65.04

d. $73.68

e. $66.71

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