Smart Industries has $10$ million shares outstanding

with a market price of $$23$ per share and no debt.

Smart generates stable profits and pays a $25\%$ tax

rate. Management plans to borrow $$80$ million on a

permanent basis and use the borrowed funds to

repurchase $$80$ million worth of their outstanding

shares. Their expectation is that the tax savings from

this transaction will benefit shareholders. Is this

expectation realistic?