Executive Chalk is financed solely by common stock and has outstanding 25 million shares with a market price of $10 a share. It now announces that it intends to issue $160 million of debt and to use the proceeds to buy back common stock.a. How is the market price of the stock affected by the announcement?b. How many shares can the company buy back with the $160 million of new debt that it issues?c. What is the market value of the firm (equity plus debt) after the change in capital structure?d. What is the debt ratio after the change in structure?e. Who (if anyone) gains or loses?

Q: Clark Industries has 200 million shares outstanding, a current share price of $30, and no debt.…

A: Total Number of shares outstanding are 200 million Share price is $30 Cash in hand or distributable…

Q: Classify the following transactions as taking place in the primary or secondary markets:  IBM issues…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Firm C currently has 320,000 shares outstanding with current market value of $33 per share and…

A: Market value of equity can be calculated from EBIT by subtracting the interest rate of both the…

Q: Blasco's has a market value equal to its book value. Currently, the firm has excess cash of €1,332,…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Show the value of the firm, EPS (earnings p. share?) and rate of return on the stock before and…

A: Capitalization rate is the projected rate of return percentage that a property will make on the…

Q: reliable Company currently is all-equity-financed. It has 10,000 shares of equity outstanding,…

A: Debt-to-equity ratio refers to those financial ratio which indicates the relative proportion of…

Q: Dye Trucking raised $150 million in new debt and used this to buy backstock. After the recap, Dye’s…

A: Shareholder Equity: It can be described as the residual claim of the owners of the company after all…

Q: Executive Cheese has issued debt with a market value of $100.56 million and has outstanding 15.60…

A: Given information : Market value of debt = $100.56 million  Number of outstanding shares = 15.6…

Q: Jetpack Ltd. has an all equity capital structure. It has total assets worth $10 million, 10,000…

A: The proportionate share of each source of finance in the total capital of a company is known as its…

Q: On January 20, Whalen Inc. sold 10 million shares of stock in an SEO. The market price of Whalen at…

A: Given: Particulars   No. shares sold 10 Primary shares 4 Venture capital 6 Underwriting…

Q: The Greenbriar is an all-equity firm with a total market value of $530,000 and 21,000 shares of…

A: Calculation of current market price per share:

Q: Executive Cheese has issued debt with a market value of $100 million and has outstanding 15 million…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Good Values, Inc., is all-equity-financed. The total market value of the firm currently is $100,000,…

A: The value of the firm derives from the value of shares. It depends upon the repurchase decisions as…

Q: The Eagle Inc. has 40 million shares​ outstanding, which are trading at​ $20 per share. Eagle…

A: Value of equity is the value of the shares of a company and its loans that the shareholders have…

Q: In previous years, Cox Transport reacquired 2 million treasury shares at $24 per share and, later, 1…

A: Weighted Average cost   No. of shares Price Total   2 24 48   1 27 27 Total 3   75 Average…

Q: Hawar International is a shipping firm with a current share price of $4.94 and 9.8 million shares…

A: Data given: Current share price=$4.94 Outstanding shares= 9.8 million Borrowed fund =$8.7 million…

Q: Trini Exports has a current market value of equity of $315,000. Currently, the firm has excess cash…

A: Excel Spreadsheet: Excel Workings:

Q: liff Corp. (CC) has an enterprise value (MV equity + debt – cash) of $330 million, $50 million in…

A: Repurchasing of shares means buy back of shares from public in return of cash.

Q: ABC SA. is financed solely by equity. Currently, the company has 20 million shares outstanding.…

A: Comment- Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: Jetpack Ltd. has an all equity capital structure. It has total assets worth $10 million, 10,000…

A: Leverage is a method to create add a potion of debt in the capital of a company, a leveraged capital…

Q: Paradise Travels is an all-equity firm that has 9,000 shares of stock outstanding at a market price…

A: Number of stock outstanding=9000Market price =$27Worth of debt=$25000Interest rate on the debt=7.3%

Q: Alto and Tenor have 15,000 shares of stock outstanding at a market price of $21 per share. The firm…

A: The weighted average cost of capital (WACC) is a company's average cost of capital from all sources,…

Q: Digital Fruit is financed solely by common stock and has outstanding 27 million shares with a market…

A: The question is based on the concept of market value of a firm and capital structure.

Q: FarCry Industries, a maker of telecommunications equipment, has 3 million shares of common stock…

A: Number of common shares = 3 million Common share price = $24 Number of preferred shares = 1 million…

Q: In previous years, Cox Transport reacquired 3 million treasury shares at $25 per share and, later, 1…

A: Treasury shares: It refers to that section of previously issued shares that are brought back from…

Q: Mercer Corp. is a equity firm with 10 million shares outstanding and $140 million worth of debt…

A: The Modigliani-Miller theorem (MM) states that the market value of a company is calculated by its…

Q: company has 80 million shares outstanding with an equity value of Kshs. 6 billion. The  company has…

A: Given, Number of shares outstanding 80 million Equity value is Kshs 6 billion Debt to equity ratio…

Q: Taunton's is an all-equity firm that has 150,000 shares of stock outstanding. The CFO is considering…

A: Stock outstanding= 150,000 shares  Borrowing= $215,000 Interest rate= 7 percent interest…

Q: Angina Inc. has 5 million shares outstanding. The firm is considering issuing an additional 1…

A: Calculate the net proceedings as follows:

Q: The company raises $5 million in equity capital by selling new shares of stock in the company to…

A: Accounting equation is  Total Assets = Total liabilities + equity

Q: Over the years, Janjigian Corporation's stockholders have provided $15,950 of capital, part when…

A: GIVEN, CAPITAL =$15,950 price per share = $44 number of outstanding shares = 950

Q: MoonCorp's current share price is $20 per share and the total share outstanding is 20 million.…

A: Here indicating the subject of Transfer of wealth which are incurred with both old shareholders and…

Q: The Taussig Company, whose stock price is currently $20.50, needs to raise $15 million by issuing…

A: Company requires the amount of $15,000,000. But there will be underwriter's compensation also.…

Q: ABC company currently has $250,000 market value (and book value) of perpetual debt outstanding…

A:

Q: MNO Oil has assets with a market value of $600 million, $64 million of which are cash. It has debt…

A: Stock price is the amount at which a security (or stock) is being traded in the stock exchange…

Q: Duncan plc is financed by 5 million shares of equity with a market capitalisation of £90 million,…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Companies X and Y both wish to raise $100 million 10-year loans. Company X wishes to borrow at a…

A: If both X and Y were to directly borrow the loans of their choice, then X would end up paying 13%…

Q: What is CC’s current debt-to-equity ratio? What is CC’s current stock price? If CC distributes $18…

A: Debt to Equity Ratio: This ratio is applied for the evaluation of the business's financial…

Q: Adam & Eve Inc. is a multinational firm that runs a global chain of for-profit blood banks, and is…

A: A) Current market value of the firm =$26.09/share * 21 million shares = $547.89 million From MM…

Q: Over the years, Masterson Corporation's stockholders have provided $35,000,000 of capital when they…

A: Market Value Added (MVA) refers to the net difference between the total value added by the investors…

Q: Brooks Corporation is financed with $32 million of 9% debt and $68 million of common equity. The…

A: Indifference point: It is the point at which the earnings per share are equal regardless of whether…

Q: In previous years, Cox Transport reacquired 4 million treasury shares at $20 per share and, later, 2…

A: Compute weighted average cost per treasury share as shown below: