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e) Your firm announces that you will issue $50 million in debt on top of the $100 million in debt you now have. Your stock
e) Your firm announces that you will issue $50 million in debt on top of the $100 million in debt you now have. Your stock (10 million shares) is trading at $20 a share. If this announcement was a surprise, and investors believe you and that the all-in relative tax advantage od debt is 10%, fill in the following table with the values you expect for each item:
| Now | After Announcement | After Execution |
MV(Equity) |
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MV(Debt) |
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Number of Shares |
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Stock Price |
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