Thank you in advance!

Question 1 Kurz Manufacturing is currently an all-equity firm with 36 million shares outstanding and a stock price of $6.00 per share. Although investors currently expect Kurz to remain an all-equity firm, Kurz plans to announce that it will borrow $41 million and use the funds to repurchase shares. Kurz will pay interest only on this debt, and it has no further plans to increase or decrease the amount of debt. Kurz is subject to a 21% corporate tax rate. a. What is the market value of Kurz's existing assets before the announcement? b. What is the market value of Kurz's assets (including any tax shields) just after the debt is issued, but before the shares are repurchased? c. What is Kurz's share price just before the share repurchase? How many shares will Kurz repurchase? d. What are Kurz's market value balance sheet and share price after the share repurchase? Question 2 Rally, Inc., is an all-equity firm with assets worth $31 billion and 13 billion shares outstanding. Rally plans to borrow $8 billion and use funds to repurchase shares. Rally's corporate tax rate is 21%, and Rally plans to keep its outstanding debt equal to $8 billion permanently. a. Without the increase in leverage, what would be Rally's share price? b. Suppose Rally offers $2.35 per share to repurchase its shares. Would shareholders sell for this price? C. Suppose Rally offers $2.66 per share, and shareholders tender their shares at this price. What will be Rally's share price after the repurchase? d. What is the lowest price Rally can offer and have shareholders tender their shares? What will be its stock price after the share repurchase in that case? Question 3 Your firm currently has 592 million in debt outstanding with a 9% interest rate. The terms of the loan require it to repay $23 million of the balance each year. Suppose the marginal corporate tax rate is 35%, and that the interest tax shields have the same risk as the loan. What is the present value of the interest tax shields from this debt? The present value of the interest tax shields is $1million. (Round to two decimal places.) Question 1 Kurz Manufacturing is currently an all-equity firm with 36 million shares outstanding and a stock price of $6.00 per share. Although investors currently expect Kurz to remain an all-equity firm, Kurz plans to announce that it will borrow $41 million and use the funds to repurchase shares. Kurz will pay interest only on this debt, and it has no further plans to increase or decrease the amount of debt. Kurz is subject to a 21% corporate tax rate. a. What is the market value of Kurz's existing assets before the announcement? b. What is the market value of Kurz's assets (including any tax shields) just after the debt is issued, but before the shares are repurchased? c. What is Kurz's share price just before the share repurchase? How many shares will Kurz repurchase? d. What are Kurz's market value balance sheet and share price after the share repurchase? Question 2 Rally, Inc., is an all-equity firm with assets worth $31 billion and 13 billion shares outstanding. Rally plans to borrow $8 billion and use funds to repurchase shares. Rally's corporate tax rate is 21%, and Rally plans to keep its outstanding debt equal to $8 billion permanently. a. Without the increase in leverage, what would be Rally's share price? b. Suppose Rally offers $2.35 per share to repurchase its shares. Would shareholders sell for this price? C. Suppose Rally offers $2.66 per share, and shareholders tender their shares at this price. What will be Rally's share price after the repurchase? d. What is the lowest price Rally can offer and have shareholders tender their shares? What will be its stock price after the share repurchase in that case? Question 3 Your firm currently has 592 million in debt outstanding with a 9% interest rate. The terms of the loan require it to repay $23 million of the balance each year. Suppose the marginal corporate tax rate is 35%, and that the interest tax shields have the same risk as the loan. What is the present value of the interest tax shields from this debt? The present value of the interest tax shields is $1million. (Round to two decimal places.)