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9. Yourfirmhasapre?taxvalueof$500millionandyourcapitalstructureis100%equity.Youhave10 million shares outstanding. a. What is the price of each share? [7] b. If you announce that you are permanently borrowing $100 million

9. Yourfirmhasapre?taxvalueof$500millionandyourcapitalstructureis100%equity.Youhave10 million shares outstanding.
a. What is the price of each share? [7]

b. If you announce that you are permanently borrowing $100 million and buying?back $100 million in stock, how many shares will you buy? [6]

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