Kurz Manufacturing is currently anall-equity firm with 22 million shares outstanding and a stock price of $15.00 per share. Although investors currently expect Kurz to remain anall-equity firm, Kurz plans to announce that it will borrow $37 million and use the funds to repurchase shares. Kurz will pay interest only on thisdebt, and it has no further plans to increase or decrease the amount of debt. Kurz is subject to a 21% corporate tax rate.

a. What is the market value ofKurz's existing assets before theannouncement?

The market value ofKurz's existing assets before the announcement is $................ million. (Round to one decimalplace.)

b. What is the market value ofKurz's assets(including any taxshields) just after the debt isissued, but before the shares arerepurchased?

The market value ofKurz's assets(including any taxshields) just after the debt isissued, but before the shares are repurchased is $................ million.(Round to one decimalplace.)

c. What isKurz's share price just before the sharerepurchase? How many shares will Kurzrepurchase?

Kurz's share price just before the share repurchase is $............... (Round to the nearestcent.)

The number of shares that Kurz will repurchase is ...............million. (Round to two decimalplaces.)

d. What areKurz's market value balancesheet, and share price after the sharerepurchase?

The market value of assets is $................million.(Round to one decimalplace.)

The debt is $..............million. (Round to the nearestinteger.)

The market value of equity is $..................million.(Round to one decimalplace.)

Share price after repurchase is $................ (Round to two decimal places.)