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Firm F is all-equity with 1,000,000 stocks outstanding, each of them worth $10. You own one share. Firm F raises $5Mns in debt and uses
Firm F is all-equity with 1,000,000 stocks outstanding, each of them worth $10. You own one share. Firm F raises $5Mns in debt and uses it to pay a special dividend to shareholders. The corporate tax rate is equal to 30%. What is your total wealth after the dividend payment?
a) $5
b) $8,5
c) $10
d) $11,5
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