BHH, currently an all-equity firm with 24,50 million shares outstanding, each worth €18,00 is considering borrowing €45,50 to repurchase some of its stocks. Once the loan is issued, the corporation plans to maintain its capital structure constant. BHH is subject to a 37,00% corporate tax rate.

At what price will BHH repurchase its shares?

Answer rating: 100% (QA)

To determine the repurchase price of BHH shares we need to consider the impact of the loan on the ca... View the full answer