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Executive Cheese has issued debt with a market value of $100 million and has outstanding 15 million shares with a market price of $10 a
Executive Cheese has issued debt with a market value of $100 million and has outstanding 15 million shares with a market price of $10 a share. It now announces that it intends to issue a further $60 million of debt and to use the proceeds to buy back common stock. Debtholders, seeing the extra risk, mark the value of the existing debt down to $85 million. Question: What is the debt ratio after the change in structure? Group of answer choices 48% 56% 50% 46% 58%
Executive Cheese has issued debt with a market value of $100 million and has outstanding 15 million shares with a market price of $10 a share. It now announces that it intends to issue a further $60 million of debt and to use the proceeds to buy back common stock. Debtholders, seeing the extra risk, mark the value of the existing debt down to $85 million.
Question: What is the debt ratio after the change in structure?
Group of answer choices
48%
56%
50%
46%
58%
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Business Law With UCC Applications
Authors: Gordon Brown, Paul Sukys
13th Edition
0073524956, 978-0073524955
