Nichols Corporations value of operations is equal to $500 million after a recapitalization (the firm had no

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Nichols Corporation’s value of operations is equal to $500 million after a recapitalization (the firm had no debt before the recap). It raised $200 million in new debt and used this to buy back stock. Nichols had no short-term investments before of after the recap. After the recap, wd = 40%. What is S (the value of equity after the recap)?

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Financial management theory and practice

ISBN: 978-1439078099

13th edition

Authors: Eugene F. Brigham and Michael C. Ehrhardt

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