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Majani Holdings has 50 million shares outstanding with an equity value of Kshs. 6 billion. The company has a debt-to-equity ratio of 0.5. The management

Majani Holdings has 50 million shares outstanding with an equity value of Kshs. 6 billion. The

company has a debt-to-equity ratio of 0.5. The management has decided to restructure

financing of the firm by issuing new equity to repay all outstanding debt.

(i) Suppose you are a shareholder holding 100 shares, but not in support of this decision.

Describe what you will do to cover for the effect of this decision on your holding, assuming

a perfect capital market.

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