Intro Roxie Corp. currently has 8 million shares outstanding, trading at $23.51. The stock's beta is 1.2. The book value of equity is $56.42 million, and the book value of long-term debt is 0. Treasuries yield 1.1% and the expected return on the S&P 500 is 5%. The company is thinking of issuing 84,000 bonds with a par value of $1,000 to repurchase its own stock. The yield to maturity on similar bonds issued by other companies is 5%. The average tax rate is 34%. Part 1 What is the current market value of equity (in $ million)? 161.49 Correct Market value of equity: E = Stock price * Number of shares outstanding = 23.51 * 8 = 188.08 (million) The market value of equity is also called the company's market capitalization. Attempt 1/99 for 10 pts. Attempt 1/99 for 10 pts. Part 2 What is the total current value of the company before announcing the restructuring (in $ million)? 161.49 Correct For an unlevered firm, the value of the firm equals the value of equity: V = E = 188.08 (million)