the greenbriar is an all-equity firm with a total market value of $584,000 and 22,800 shares of stock outstanding. management is considering issuing $197,000 of debt at an interest rate of 10 percent and using the proceeds on a stock repurchase. ignore taxes. how many shares will the firm repurchase if it issues the debt securities? multiple choice 9,323 shares 58,400 shares 7,691 shares 8,546 shares 769 shares

Shares are fractional ownership interests in a corporation. For certain businesses, shares are a type of financial instrument that allows for the equitable distribution of any declared residual revenues in the form of payments. A stock that does not generate a return does not share its income with its owners.

Briefing :

Price per share equals Market Value of the Firm / Shares Outstanding.

Price per share = $584,000 / 22,800 shares

Price per share = $ 25.6140 per share

Now we must evaluate how many shares may be bought with debt totaling $197,000.

Number of shares to be repurchased = Debt amount / price per share

Number of shares to be repurchased = $197,000 / $25.6140

Number of shares to be repurchased = 7,691.09

Thus number of shares to be repurchased in 7,691 shares

Consequently, there will be cases with similar shares acquired.

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