Samrsquos smokehouse wants to recapitalize and repurchase


Sam’s Smokehouse wants to recapitalize and repurchase shares. The company currently has 900 shares (and no debt), but is thinking about borrowing $9,000 at 10% per year and buying back 150 of those shares. What is the indifference point between the two strategies?  Please show work.

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Financial Management: Samrsquos smokehouse wants to recapitalize and repurchase
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