The company is owned by a private equity fund that wishes to do a leveraged recapitalization. To do this, the company will borrow an additional $60 and combine it with $40 of its cash to pay out a special $100 cash distribution to its shareholders. What will happen to the market-value balance sheet and what will the shares be worth?

Answer rating: 100% (QA)

Here is what will happen to the marketvalue balance sheet and share value as a result of the leverag... View the full answer