Question Apowe Screen Capture Pro Indell stock has a current market value of $150 million and a beta of 2.00. Indell currently has risk-free debt as well. The firm decides to change its capital structure by issuing $21.17 million in additional risk- free debt, and then using this $21.17 million plus another $16 million in cash to repurchase stock. With perfect capital markets, what will the beta of Indell stock be after this transaction? The beta of Indell stock after the recapitalization is __ (Round to 2 decimal places) Expert Answer 100% (1 rating)Apo e FRAVIN MANDORA answered this Scre SEE THE SCREENSHOT(S). ANY DOUBTS, FEEL FREE TO ASK. THANK YOU 05:39 x 20-06-2021 X D584 K A B C D E F G H 566 567 INDELL 568 IF DEBT IS RISK FREE 569 570 Be Bu *( 1+ D/E) = Bu *( E+D)/E = Bu *EV/E 571 572 D = NET DEBT 573 EV= ENTERPRISE VALUE 574 575 NOW DEBT IS ISSUED WORTH = 21.27 AND CASH = 16 USED TO REPURCHASE STOCK 576 AS TAXES ARE ABSENT, EV WILL NOT CHANGE, BUT EQUITY WILL BE 150 - 21.17-16 = 112.83 577 578 SO EV = 150 AND E= 112.83 579 580 Be = 2*(150/112.83) 581 ANSWER Be = 2.65886732 582 2.66 [ROUNDED TO 2 DECIMALS] 583 584 585 586 587 588 589 deberk Sheet1 PIZZA abc xyz debt AMC |global mydeco WENDY | EFFECTIVE TAX GRUMM |acort weak PIZZAcapital exp malia MILTON NATNAH C.. . 0