Question
The CEO is considering a proposed option in which they are going to borrow more to reduce their current equity by 20%. Calculate the new
The CEO is considering a proposed option in which they are going to borrow more to reduce their current equity by 20%.
Calculate the new Debt and Equity under the proposed option, if more debt is to be taken to reduce 20% of the current market value equity.
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| Current option | Proposed option |
| Debt ($) | $10,551.7m |
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|
|
|
|
| Equity ($)
No. of shares | $16.38B
228.88m |
|
|
|
|
|
| Price per Share
| $71.57 | $71.57 |
| Debt + Equity ($) | $26,891,700,000 |
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The Oxford Handbook Of Entrepreneurial Finance
Authors: Douglas Cumming
1st Edition
0195391241, 978-0195391244
