Question
VanMannen Foundations, Inc. (VF) is a zero-growth company that currently has zero debt, and it has the data shown below. EBIT =$80,000 Growth =0% Orig
VanMannen Foundations, Inc. (VF) is a zero-growth company that currently has zero debt, and it has the data shown below.
EBIT =$80,000
Growth =0%
Orig cost of equity, rs =10.0%
No. of shares = 10,000
Price per share = $60.00
Tax rate = 25%
What would the stock price be if VF issued the new debt and immediately used the proceeds to repurchase stock?
The answer to this question is $70.18, how do I get that answer?
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Personal Financial Planning
Authors: Lewis J. Altfest
2nd edition
1259277186, 978-1259277184
