1. Peach Corp. is an all-equity firm with 60 shares outstanding, selling at $20/share. To capture the tax benefit of debt, Peach plans to sell bonds with a face value of $286 and use the proceeds to repurchase shares in the market. If the corporate tax rate is 20%, what would be the firm value after the repurchase?
2. Peach Corp. is an all-equity firm with 60 shares outstanding, selling at $20/share. To capture the tax benefit of debt, Peach plans to sell bonds with a face value of $237 and use the proceeds to repurchase shares in the market. If the corporate tax rate is 20% and the bonds sell at par, what is the number of shares outstanding after the stock repurchase?