Question: can you plaese explain step by step the solution and hpw we are thinking to solve it Carlstens Metallica AB was a firm with 100
Carlstens Metallica AB was a firm with 100 million shares trading at SEK 18/share, debt outstanding of SEK 600 million and a cost of capital of 10%, prior to a recapitalization. It has just borrowed SEK 920 million and completed a buyback of 40 million shares at SEK 23/share. If the remaining shares trade at SEK 28 after the buyback, estimate the cost of capital after the buyback. (You can assume that the company is in stable growth, growing 2% a year in perpetuity) I Carlstens Metallica AB was a firm with 100 million shares trading at SEK 18/share, debt outstanding of SEK 600 million and a cost of capital of 10%, prior to a recapitalization. It has just borrowed SEK 920 million and completed a buyback of 40 million shares at SEK 23/share. If the remaining shares trade at SEK 28 after the buyback, estimate the cost of capital after the buyback. (You can assume that the company is in stable growth, growing 2% a year in perpetuity)
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