A firm’s value of operations is equal to $800 million after a recapitalization. (The firm had no debt before the recap.) The firm raised $200 million in new debt and used this to buy back stock. The firm had no short-term investments before or after the recap. After the recap, w_d = 25%. The firm had 10 million shares before the recap. What is S (the value of equity after the recap)?

($600 million) What is P_Post (the stock price after the recap)?

($80/share) What is n_Post (the number of remaining shares after the recap)?