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Monet paintings is an all-equity firm with 30 million shares outstanding, which are currently trading at $40 per share. The Board of Directors has announced
Monet paintings is an all-equity firm with 30 million shares outstanding, which are currently trading at $40 per share. The Board of Directors has announced that they will change the firm capital structure by issuing $1000 million in debt. The $1000 million raised by this issue will be used to repurchase existing shares of stock. Assume that capital markets are perfect. a) Without performing any calculations, explain what the share price of this company will be after the change
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