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xyz corporation is a mid sized firm with 10 million shares outstanding, trading at 25 each, debt outstanding os 50 million and no excess cash.
xyz corporation is a mid sized firm with 10 million shares outstanding, trading at 25 each, debt outstanding os 50 million and no excess cash. It is estimated that wacc which is 11% currently, will drop to 10%, if the firm borrows 100 million and buys back stock. Estimate expected change in stock price is expected earnings growth is 5% and all buyback happens at new price
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