Baruk Industries has no cash and a debt obligation of $31 million that is now due. The

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Baruk Industries has no cash and a debt obligation of $31 million that is now due. The market value of Baruk’s assets is $77 million, and the firm has no other liabilities. Assume perfect capital markets.

a. Suppose Baruk has 11 million shares outstanding. What is Baruk’s current share price?

b. How many new shares must Baruk issue to raise the capital needed to pay its debt obligation?

c. After repaying the debt, what will Baruk’s share price be?

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Corporate Finance The Core

ISBN: 9781292158334

4th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Feb 29, 2024 04:00 AM

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Baruk Industries has no cash and a debt obligation of $31 million that is now due. The

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Analyzing Baruk Industries a Current Share Price Company Value Baruks assets are worth 77 million an...View the full answer

Corporate Finance The Core

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