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Walmart has 20 million shares outstanding with a market price of $18 per share and no debt. Walmart has had consistently stable earnings, and pays
Walmart has 20 million shares outstanding with a market price of $18 per share and no debt. Walmart has had consistently stable earnings, and pays a 34% tax rate. Management plans to borrow $120 million on a permanent basis through a leveraged recapitalization in which they would use the borrowed funds to repurchase outstanding shares. Calculate Walmart's share price following announcement of the recapitalization plan.
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