As an analyst, you are tracking the financial performance of Stay Swift Corp. (SSC) The company has been 100% eqity owned, but recently mad changes to its capital structure. You have collected the following information recapializaion: -SSC issued $12,500,000 in new debt to buy back stock

-The firm had no short terms investments before or after recapitalization

- SSC had 1,250,000 shares outstanding before the recapit

- SSC's capital structure now has 25% debt

- The company's operations are valued at $50 million after recapitalization

1. Based on the information available, solve for the values in the following table. Assume that you are in a Modigliani and Miller (M&M) world with no taxes.

Stock price before the repurchase	$52, $44, $100, or $40 per share
Number of shares repurchased	625,000, 500,000, 468,750, or 312,500 shares
value of equity post repurchase	$37.50 million, 30.00 million, 18.75 million , or 26.25 million

Now consider this case: 2. If Stay Swift Corp. (SSC) deciedes to deleverage in the future, the total number of shares outstanding will keep decreasing until creditors own 100% of the company. Is the statmenet true or false?