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Please answer using EXCEL ONLY!!! Other answers will not be accepted. I will upvote a correct answer 4. Executive-Talk Inc is financed solely by common
Please answer using EXCEL ONLY!!! Other answers will not be accepted. I will upvote a correct answer
4. Executive-Talk Inc is financed solely by common stock and has outstanding 29 million shares with a market price of $18 a share. It now announces that it intends to issue $270 million of debt and to use the proceeds to buy back common stock. Assume the corporate tax rate is zero. A. How is the market price of the stock affected by the announcement? B. How many shares can the company buy back with the $270 million of new debt that it issues? C. What is the market value of the firm (equity plus debt) after the change in capital structure? D. Did the market value of the firm change? E. What is the debt ratio after the change in structure? F. Who (if anyone) gains or loses
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