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River Cruises is all - equity - financed. Current Data Number of shares 1 0 0 , 0 0 0 Price per share $ 1
River Cruises is allequityfinanced.
Current Data
Number of shares
Price per share $
Market value of shares $
Outcomes
State of the Economy
Slump Normal Boom
Profits before interest $ $ $
Suppose it now issues $ of debt at an interest rate of and uses the proceeds to repurchase shares. Assume that the firm pays no taxes and that debt finance has no impact on firm value. Refer to the above table to compute the missing data.
Note: Do not round intermediate calculations. Round "Earnings per share" to decimal places. Enter "Return on shares" as a percent rounded to decimal places.
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