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Orange Corp. is an all-equity firm with 50 million shares outstanding, selling at $20/share. To capture the tax benefit of debt, Orange plans to sell
Orange Corp. is an all-equity firm with 50 million shares outstanding, selling at $20/share. To capture the tax benefit of debt, Orange plans to sell bonds with a face value of 203 and use the proceeds to repurchase shares in the market. If the corporate tax rate is 20%, what would be the stock price after the bond issuance?
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