Question
P14-9 (similar to) Zetatron is an all-equity firm with 190 million shares outstanding, which are currently trading for $21.76 per share. A month ago, Zetatron
P14-9 (similar to) Zetatron is an all-equity firm with 190 million shares outstanding, which are currently trading for $21.76 per share. A month ago, Zetatron announced it will change its capital structure by borrowing $784 million in short-term debt, borrowing $ 631 million in long-term debt, and issuing $684 million of preferred stock. The $2 comma 099 million raised by these issues, plus another $ 58 million in cash that Zetatron already has, will be used to repurchase existing shares of stock. The transaction is scheduled to occur today. Assume perfect capital markets. a. What is the market value balance sheet for Zetatron i. Before this transaction? ii. After the new securities are issued but before the share repurchase? iii. After the share repurchase? b. At the conclusion of this transaction, how many shares outstanding will Zetatron have, and what will the value of those shares be? a.i. What is the market value balance sheet for Zetatron before this transaction? Account Amount Cash $58 million (Round to the nearest integer.) Non- Cash Assets $4483 million (Round to the nearest integer.) Total Assets $4446 million (Round to the nearest integer.) Total Liabilities $nothing million (Round to the nearest integer.) Total Equity $nothing million (Round to the nearest integer.) Enter your answer in the edit fiel
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