KMS corporation has assets of $500 million, $50 million of which are cash. It has debt of

Question:

KMS corporation has assets of $500 million, $50 million of which are cash. It has debt of $200 million. If KMS repurchases $20 million of its stock:

a. What changes will occur on its balance sheet?

b. What will its new leverage ratio be?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...