Zetatron is an all-equity firm with 220 million shares outstanding, which are currently trading for $16.57 per share. A month ago, Zetatron announced it will change its capital structure by borrowing $546 million in short-term debt, borrowing $397 million in long-term debt, and issuing $520 million of preferred stock. The $1,463 million raised by these issues, plus another $98 million in cash that Zetatron already has, will be used to repurchase existing shares of stock. The transaction is scheduled to occur today. Assume perfect capital markets.

a. What is the market value balance sheet for Zetatron

a.i. What is the market value balance sheet for Zetatron before this transaction?

Account Amount

Cash $?? Million

Non-Cash Assets $?? Million

Total Assets $??Million

Total Liabilities $??Million

Total Equity $??Million

a.ii. What is the market value balance sheet for Zetatron after the new securities are issued but before the share repurchase?

Account Amount

Cash $?? Million

Non-Cash Assets $?? Million

Total Assets $??Million

Total Liabilities $??Million

Total Equity $??Million

a.iii. What is the market value balance sheet for Zetatron after the share repurchase?

Account Amount

Cash $?? Million

Non-Cash Assets $?? Million

Total Assets $??Million

Total Liabilities $??Million

Total Equity $??Million

b. At the conclusion of this transaction, how many shares outstanding will Zetatron have, and what will the value of those shares be?

At the conclusion of this transaction, the number of shares outstanding Zetatron will have is ?? million.

The price share will be ??.