Consider the following share repurchase proposal: Blaine will use $209 million of cash and $50 million in new debt (borrowed at an interest rate of 6.75%) to repurchase 14 million shares at a price of $18.50 per share. Evaluate this proposal and its effect on the companys financial statements (income statement and reorganized balance sheet), EPS, ROE, interest coverage ratio, debt ratio, among other measures.

Can we quantify the pre- and post-repo cost of financial distress for the firm? Why or why not?