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Seeking help in figuring out solution for B below. Thank you. Rally, Inc., is an all-equity rm with assets worth $44 billion and 18 billion

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Seeking help in figuring out solution for B below. Thank you.

image text in transcribed
Rally, Inc., is an all-equity rm with assets worth $44 billion and 18 billion shares outstanding. Rally plans to borrow $14 billion and use funds to repurchase shares. Rally's corporate tax rate is 35%, and Rally plans to keep its outstanding debt equal to $14 billion permanently. a. Wllhout the increase in leverage, what would be Rally's share price? b. Suppose Rally oers $2.50 per share to repurchase its shares. Would shareholders sell for this pritm'? c. Suppose Rain offers $2.39 per share, and shareholders lender their shares atthis price. What will be Raily's share price after the repurchase? d. What is the lowest price Rally can oer and have shareholders tender their shares? What will be its stock price alter the share repurchase in that case? a. Wlthout the increase in leverage, what would be Rally's share price? Without the increase in leverage, Rally's share pnce is S 2.4-4 . (Round to the nearest cent.) b. Suppose Rally offers 8260 per share to repurchase its shares. Would shareholders sell for this price? No . (Select from the drop-down menu.) The minimum share price they wouid sell for is $ . (Round tothe nearest cent.)

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