Question: please answer all questions Recapitalization is the process through which firms make desired changes in their capital structure by using debt capital to repurchase outstanding

 please answer all questions Recapitalization is the process through which firms
make desired changes in their capital structure by using debt capital toplease answer all questions

Recapitalization is the process through which firms make desired changes in their capital structure by using debt capital to repurchase outstanding equity. Firms use a recap for several reasons to achieve or maintain the firm's optimal capital structure, to defend against a hostile takeover, to minimize taxes, or as an exit strategy for venture capitalists. As an analyst, you are tracking the financial performance of Blue Ram Brewing Company. The company has been 100% equity owned for years, but recently the firm's managers made changes to Blue Ram's capital structure. You have collected the following Information regarding the company's recapitalization: Blue Ram issued $1,800,000 in new debt to repurchase its outstanding stock. . The firm had no short-term investments before or after the recapitalization. Blue Ram had 225,000 shares outstanding before the recapitalization. Blue Ram's capital structure now has 20.00% debt. The company's operations are valued at $9,000,000 before and after the recapitalization Based on the information available, solve for the values in the following table. Click on the dropdown menus and select the best answer. Assume that you are in a Modigliani and Miller (MM Proposition I) world with no taxes. Value Stock price before the repurchase Number of shares repurchased Value of equity post repurchase Based on your findings, you prepared a report containing several inferences. While proofreading, you come across the following inference: Based on the Information available, solve for the values in the following table. Click on the dropdown menus and select the best answer. Assume that you are in a Modigliani and Miller (MM Proposition 1) world with no taxes. Value Stock price before the repurchase Number of shares repurchased Value of equity post repurchase Based on your findings, you prepared a report containing several inferences. While proofreading, you come across the following inference: If Blue Ram Brewing Company decides to deleverage in the future, the total number of shares outstanding will keep decreasing until creditors own 100% of the company. Is the statement true or false? False True

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