Question
I need help figuring market value and market value of equity. An all-equiry business has 175M shares outstanding selling for $20/share. Management believes interest rates
I need help figuring market value and market value of equity.
An all-equiry business has 175M shares outstanding selling for $20/share. Management believes interest rates are unreasonably low and decides to execute a leveraged recapitalization. It will raise $1B in debt and repurchase 50M shares.
What is the market value value of the company prior to the recap and what is the market value of equity?
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Fundamentals of Multinational Finance
Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman
5th edition
205989756, 978-0205989751
