Question: Look back at the Johnson & Johnson example in Section 18-1. Suppose Johnson & Johnson increases its long-term debt to $30 billion. It uses the

Look back at the Johnson & Johnson example in Section 18-1. Suppose Johnson & Johnson increases its long-term debt to $30 billion. It uses the additional debt to repurchase shares. Reconstruct Table 18.4B with the new capital structure. How much additional value is added for Johnson & Johnson shareholders if the table's assumptions are correct?

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Longterm debt increases by 30000 13031 16969 million The corporate tax rate is 35 so ... View full answer

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