{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-09T08:05:56-04:00", "answer_date": "2024-06-09 08:05:56", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "2507095", "url": "\/study-help\/questions\/hawar-international-is-a-shipping-firm-with-a-current-share-2507095", "question_creation_date_js": "2024-06-09T08:05:56-04:00", "question_creation_date": "Jun 09, 2024 08:05 AM", "meta_title": "[Solved] Hawar International is a shipping firm wi | SolutionInn", "meta_description": "Answer of - Hawar International is a shipping firm with a current share price of $5.50 and 10 million shares outstanding. Suppose | SolutionInn", "meta_keywords": "hawar,international,shipping,firm,current,share,price,$5.50,10,million,shares,outstanding", "question_title_h1": "Hawar International is a shipping firm with a current share price of $5.50 and 10 million shares outstanding. Suppose Hawar announces plans to lower its", "question_title": "Hawar International is a shipping firm with a current share price of", "question_title_for_js_snippet": "Hawar International is a shipping firm with a current share price of $5 50 and 10 million shares outstanding Suppose Hawar announces plans to lower its corporate taxes by borrowing $20 million and repurchasing shares a With perfect capital markets, what will the share price be after this announcement Suppose that Hawar pays a corporate tax rate of 30 , and that shareholders expect the change in debt to be permanent With perfect capital markets, the share price will be $ per share Suppose that Hawar pays a corporate tax rate of 30 , and that shareholders expect the change in debt to be permanent b If the only imperfection is corporate taxes, what will the share price be after this announcement If the only imperfection is corporate taxes, the share price will be $ per share c Suppose the only imperfections are corporate taxes and financial distress costs If the share price rises to $5 75 after this announcement, what is the PV of financial distress costs Hawar will incur as the result of this new debt If the share price rises to $5 75 after this announcement, the PV of financial distress costs Hawar will incur as the result of this new debt will be $ million ", "question_description": "

Hawar International is a shipping firm with a current share price of $5.50 and 10 million shares outstanding. Suppose Hawar announces plans to lower its corporate taxes by borrowing $20 <\/span> million and repurchasing shares.<\/span><\/p>

<\/span><\/p>

a. With perfect capital markets, what will the share price be after this announcement?<\/span><\/p>

Suppose that Hawar pays a corporate tax rate of 30%, and that shareholders expect the change in debt to be permanent. <\/span><\/p>

<\/span><\/p>

With perfect capital markets, the share price will be $ ??? per share.<\/span><\/p>

<\/span> <\/span><\/p>

Suppose that Hawar pays a corporate tax rate of 30%, and that shareholders expect the change in debt to be permanent.<\/span><\/p>

b. If the only imperfection is corporate taxes, what will the share price be after this announcement?<\/span><\/p>

<\/span><\/p>

If the only imperfection is corporate taxes, the share price will be $ ??? per share.<\/span><\/p>

<\/span><\/p>

c. Suppose the only imperfections are corporate taxes and financial distress costs. If the share price rises to $5.75 after this announcement, what is the PV of financial distress costs Hawar will incur as the result of this new debt? <\/span><\/p>

<\/span><\/p>

If the share price rises to $5.75 after this announcement, the PV of financial distress costs Hawar will incur as the result of this new debt will be $ ??? million.<\/span><\/p>

<\/p>", "transcribed_text": "", "related_book": { "title": "Botany An Introduction To Plant Biology", "isbn": "1284077535, 978-1284077537", "edition": "6th Edition", "authors": "James D. 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