Company has 40 million commons stock shares outstanding with a market capitalization of $2.5 billion. It also has 850 million in debt outstanding. CEO made decision to recapitalize the company by issuing new equity and completely repaying all the outstanding debt. How many shares need to be offered via secondary offering to replace existing debt? (Assume no transaction costs tax implications or market price reaction to secondary offering.)

Answer rating: 100% (QA)

To replace the existing debt of 850 million with new equity we ne... View the full answer