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Alphabet Inc. (GOOG) is currently unlevered and the market's expectation is that it will remain unlevered forever. GOOG has 750 million shares outstanding and its
Alphabet Inc. (GOOG) is currently unlevered and the market's expectation is that it will remain unlevered forever. GOOG has 750 million shares outstanding and its stock price is $800. GOOG's marginal tax rate is 20%. This afternoon, in a surprise press release, Alphabet announces that tomorrow morning, it will issue $200 billion of debt, using the proceeds to repurchase shares of equity, and that it will maintain this level of debt going forward. What is the effect of this announcement on the price of GOOG stock
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