Question
Amdoc INC. is financed solely by common stock and has outstanding 38 million shares with a market price of $36 per share. It now announces
Amdoc INC. is financed solely by common stock and has outstanding 38 million shares with a market price of $36 per share. It now announces that it intends to issue $540 million of debt and to use the proceeds to buy back common stock. What is the market value of the firm after the change in the capital structure?
A. $540 million
B. $828 million
C. $2196 million
D. $1368 million
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Entrepreneurial Finance
Authors: Philip J. Adelman, Alan M. Marks
4th Edition
0132434792, 9780132434799
