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Introduction Caribou Coffee, Inc. (CCI) is a profitable, debt-free caf/coffee-shop chain. centered in America's northern midwest. Your Equity/Debt team is considering this project: ALT-0, buy
Introduction Caribou Coffee, Inc. (CCI) is a profitable, debt-free caf/coffee-shop chain. centered in America's northern midwest. Your Equity/Debt team is considering this project: ALT-0, buy all of CCI's stock and re-organize its capital structure to include some debt (D) and equity (E), noting that: - The asking price for 100% of the firm's stock is: $700.00 MM - Your team believes that an optimal capital structure for the firm would be: 65% D/( DE) - The equity investors will pay wor (1-D)(D+E)% of the purchase price from their own funds. - CCI will take out a long-term loan at the moment of close, provided by the debt investors on the team. to pay the current owners the rest of the purchase price Here is an incomplete sunlysis of this project: (All dollar quantities are in SMM, as given above). Financing Strudware Ppp-s) - D+E-CAPE - Market's view of Enterprise Value Wp D E Existing As purchased $700.0 $700.0 0.0% S0.0 $700.0 aa bb E Question 13 1 pts What is quantity cc? Question 14 1 pts What is quantity bb
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