As an analyst, you are tracking the financial performance of Unitax Co. The company has been 100% equity owned but recently made changes to its capital structure. You have collected the following information about the recapitalization:

	Unitax issued $20,000,000 in new debt to buy back stock.
	The firm had no short-term investments before or after the recapitalization.
	Unitax had 2,500,000 shares outstanding before the recapitalization.
	Unitaxs capital structure now has 20% debt.
	The companys operations are valued at $100 million after recapitalization.

Based on the information available, solve for the values in the following table. Click on the dropdown menus and then select the best answer. Assume that you are in a Modigliani and Miller (M&M) world with no taxes.

	Value
Stock price before the repurchase
Number of shares repurchased
Value of equity post repurchase

Based on your analysis, you prepared a report with several inferences. While proofreading, you come across the following inference.

Consider this case:

If Unitax Co. decides to deleverage in the future, the total number of shares outstanding will keep decreasing until creditors own 100% of the company.

Is the statement true or false?

True

False