subject
Business, 30.12.2021 08:00 katyrb02

A firm currently has 2000 shares selling for $20 a share. The firm currently has no debt. The corporate tax rate is 35% and there are no personal taxes or financial distress costs. If the firm announces it is issuing $10,000 in bonds and using the proceeds to repurchase shares, what will the total value of the firm's equity (E) be after the repurchase is complete?

ansver
Answers: 3

Another question on Business

question
Business, 22.06.2019 07:00
Pennewell publishing inc. (pp) is a zero growth company. it currently has zero debt and its earnings before interest and taxes (ebit) are $80,000. pp's current cost of equity is 10%, and its tax rate is 40%. the firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. refer to the data for pennewell publishing inc. (pp). pp is considering changing its capital structure to one with 30% debt and 70% equity, based on market values. the debt would have an interest rate of 8%. the new funds would be used to repurchase stock. it is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. if this plan were carried out, what would be pp's new value of operations? a. $484,359 b. $521,173 c. $584,653 d. $560,748 e. $487,805
Answers: 1
question
Business, 22.06.2019 08:20
How much does a neurosurgeon can make most in canada? give me answer in candian dollar
Answers: 1
question
Business, 22.06.2019 11:40
If kroger had whole foods’ number of days’ sales in inventory, how much additional cash flow would have been generated from the smaller inventory relative to its actual average inventory position? round interim calculations to one decimal place and your final answer to the nearest million.
Answers: 2
question
Business, 22.06.2019 16:40
Job applications give employers uniform information for all employees,making it easier to
Answers: 1
You know the right answer?
A firm currently has 2000 shares selling for $20 a share. The firm currently has no debt. The corpor...
Questions
Questions on the website: 13722363