Assume that Swedish Match will receive a credit rating of BBB if it moves forward with the new financial policy. Answer the following:

What is the enterprise value before and after the transaction?

How many shares will be repurchased and at what price?

What is the share price of Swedish Match before and after the transaction?

$\backslash$table$[[,$Maturity$],[3-$month,$6-$month,$1-$year,$5-$year,$10-$year,$20-$year,$30-$year,$],[$AAA$,,,,,,,],[$AA$,2\mathrm{.}179,2\mathrm{.}218,2\mathrm{.}348,3\mathrm{.}150,3\mathrm{.}762,4\mathrm{.}394,$N$/$A$],[$A$,2\mathrm{.}246,2\mathrm{.}262,2\mathrm{.}389,3\mathrm{.}269,3\mathrm{.}918,4\mathrm{.}612,4\mathrm{.}539],[$BBB$,2\mathrm{.}284,2\mathrm{.}336,2\mathrm{.}474,3\mathrm{.}349,4\mathrm{.}024,4\mathrm{.}624,4\mathrm{.}970],[$Benchmark ${?}^a,2\mathrm{.}463,2\mathrm{.}484,2\mathrm{.}688,3\mathrm{.}819,4\mathrm{.}541,5\mathrm{.}151,5\mathrm{.}077],[,2\mathrm{.}065,2\mathrm{.}119,2\mathrm{.}225,3\mathrm{.}028,3\mathrm{.}695,4\mathrm{.}293,4\mathrm{.}383]]$

Source: Bloomberg, accessed September $2011.$

a Benchmark interest rate refers to the average of euro$-$area AAA$-$rated government debt $($sovereign bonds issued by France and Germany$).$

Exhibit $5$ U$.$S$.$ Industrial Firms, Aggregate Average Financial Ratios by Credit Rating, $2002-2004$

$\backslash$table$[[,$Credit Rating$],[,$AAA,AA$,$A$,$BBB$,$BB$,$B$,$CCC$],[$EBIT interest coverage $($x$),23\mathrm{.}8,19\mathrm{.}5,8\mathrm{.}0,4\mathrm{.}7,2\mathrm{.}5,1\mathrm{.}2,0\mathrm{.}4],[$EBITDA interest coverage $($x$),25\mathrm{.}5,24\mathrm{.}6,10\mathrm{.}2,6\mathrm{.}5,3\mathrm{.}5,1\mathrm{.}9,0\mathrm{.}9],[$Total debt$/$EBITDA $($x$),0\mathrm{.}4,0\mathrm{.}9,1\mathrm{.}6,2\mathrm{.}2,3\mathrm{.}5,5\mathrm{.}3,7\mathrm{.}9],[\backslash$table$[[$Market leverage $($debt$/$debt plus market$],[,$ capitalization$)(\%)]],3\mathrm{.}1,7\mathrm{.}2,16\mathrm{.}1,24\mathrm{.}5,35\mathrm{.}5,53\mathrm{.}5,78\mathrm{.}2]]$