Your firm announces that you will issue $50 million in debt on top of the $100 million
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Your firm announces that you will issue $50 million in debt on top of the $100 million in debt you now have. Your stock (10 million shares) is trading at $20 a share. If this announcement was a surprise, and investors believe you and that the all-in relative tax advantage od debt is 10%, fill in the following table with the values you expect for each item:
Now | After Announcement | After Execution | |
MV(Equity) | |||
MV(Debt) | |||
Number of Shares | |||
Stock Price |
Expert Answer:
Answer rating: 100% (QA)
MV Market Value Equity Number of Shares Share Price MVDebt Total outstanding debt Now Number of Shar... View the full answer
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