Question
Baruk Industries has no cash and a debt obligation of $34 million that is now due. The market value of Baruk's assets is $80 million,
Baruk Industries has no cash and a debt obligation of
$34
million that is now due. The market value of Baruk's assets is
$80
million, and the firm has no other liabilities. Assume perfect capital markets.
a. Suppose Baruk has
19
million shares outstanding. What is Baruk's current share price?
b. How many new shares must Baruk issue to raise the capital needed to pay its debt obligation?
c. After repaying the debt, what will Baruk's share price be?
Question content area bottom
Part 1
a. Suppose Baruk has
19
million shares outstanding. What is Baruk's current share price?
If Baruk has
19
million shares outstanding, the current share price is
$enter your response here.
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