Problem 16-5 Stock Price After Recapitalization

Lee Manufacturing's value of operations is equal to $900 million after a recapitalization. (The firm had no debt before the recap). Lee raised $300 million in new debt and used this to buy back stock. Lee had no short-term investments before or after the recap. After the recap, wd = 1/3. The firm had 22 million shares before the recap. What is P (the stock price after the recap)? Round your answer to the nearest cent.

$

Problem 16-4 Value of Equity after Recapitalization

Nichols Corporation's value of operations is equal to $500 million after a recapitalization (the firm had no debt before the recap). It raised $100 million in new debt and used this to buy back stock. Nichols had no short-term investments before or after the recap. After the recap, wd = 20%. What is S (the value of equity after the recap)? Enter your answer in millions of dollars.

$ million

Problem 16-2 Unlevered Beta

Counts Accounting has a beta of 1.55. The tax rate is 35%, and Counts is financed with 60% debt. What is Counts' unlevered beta? Round your answer to two decimal places.