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The capital market is perfect. Qualcomm Inc. has $20 billion in debt, total equity capitalization of $10 billion, and an equity beta of 1. Included

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The capital market is perfect. Qualcomm Inc. has $20 billion in debt, total equity capitalization of $10 billion, and an equity beta of 1. Included in Qualcomm's assets was $10 billion in cash and risk-free securities. Qualcomm Inc.'s debt has an AAA rating with a beta of 0. Suppose the firm now uses the $5 billion cash to repurchase its stocks. a. What is the firm's unlevered beta before the stock repurchase? b. Should the firm's unlevered beta keep the same after the stock repurchase? Just answer yes or no. c. What is the value of the firm's equity after the stock repurchase? d. What is the beta of the firm's equity after the stock repurchase? e. Should the firm's stock price keep the same after the stock repurchase? Just answer yes or no. The capital market is perfect. Qualcomm Inc. has $20 billion in debt, total equity capitalization of $10 billion, and an equity beta of 1. Included in Qualcomm's assets was $10 billion in cash and risk-free securities. Qualcomm Inc.'s debt has an AAA rating with a beta of 0. Suppose the firm now uses the $5 billion cash to repurchase its stocks. a. What is the firm's unlevered beta before the stock repurchase? b. Should the firm's unlevered beta keep the same after the stock repurchase? Just answer yes or no. c. What is the value of the firm's equity after the stock repurchase? d. What is the beta of the firm's equity after the stock repurchase? e. Should the firm's stock price keep the same after the stock repurchase? Just answer yes or no

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