s an analyst, you are tracking the financial performance of Stay Swift Corp. (SSC) The company has been 100% equity owned but recently made changes to its capital structure. You have collected the following information about the recapitalization:

	SSC issued $10,000,000 in new debt to buy back stock.
	The firm had no short-term investments before or after the recapitalization.
	SSC had 1,250,000 shares outstanding before the recapitalization.
	SSCs capital structure now has 20% debt.
	The companys operations are valued at $50 million after recapitalization.

Based on the information available, solve for the values in the following table. Click on the dropdown menus and then select the best answer. Assume that you are in a Modigliani and Miller (M&M) world with no taxes.

	Value
Stock price before the repurchase	?
Number of shares repurchased	?
Value of equity post repurchase	?

Based on your analysis, you prepared a report with several inferences. While proofreading, you come across the following inference.

Consider this case:

Recapitalization might increase the EPS, but the price per share remains the same.

Is the statement true or false?

True

False