Mean Green Co., is a publicly traded firm with 7 million shares outstanding. The firm has $20 million of  debt at an average cost of 5%. The firm's beta is currently 1.20 and faces a 30% tax rate. Further, the  current yield-to-maturity on T-Bills is 2%, and the return on the S&P 500 Index is 10%. Assume the stock is trading at $35 per share. 

The Firm is considering issuing new debt at a cost of 5% to  repurchase 20% of the firm's equity. Post recapitalization, What is the value of equity per share after the announcement of the recapitalization.

Answer rating: 100% (QA)

To calculate the new value of equity per share after the recapitalization we need to first determine ... View the full answer