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Galt Industries has 50 million shares outstanding and a market capitalization of $1.25 billion. It also has $750 million in debt outstanding. Galt Industries has

Galt Industries has 50 million shares outstanding and a market capitalization of $1.25 billion. It also has $750 million in debt outstanding. Galt Industries has decided to delever the firm by issuing new equity and completely repaying all the outstanding debt. Assume perfect capital markets.

  1. How many shares Galt must issue to delever itself?
  2. Suppose you are a shareholder in Galt Industries holding 100 shares, and you disagree with this decision to delever the firm. How can you undo the effect of this decision? Fully explain your answer.

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