Exercise 3 (Equity financing) 130 marks] Blackboard productions is financed solely by common stock and has 25 million sh

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Exercise 3 (Equity financing) 130 marks] Blackboard productions is financed solely by common stock and has 25 million sh

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Exercise 3 Equity Financing 130 Marks Blackboard Productions Is Financed Solely By Common Stock And Has 25 Million Sh 1
Exercise 3 Equity Financing 130 Marks Blackboard Productions Is Financed Solely By Common Stock And Has 25 Million Sh 1 (52.03 KiB) Viewed 20 times
Exercise 3 (Equity financing) 130 marks] Blackboard productions is financed solely by common stock and has 25 million shares outstanding with a market price of $10 per share. It now announces that it intends to issue $160 million of debt and to use the proceeds to buy back common stock. Assume perfect capital markets. transaction? (a) What is the value of the equity prior to the [10 marks] [SHOW YOUR WORKING] (b) How many stocks can the company buy? [SHOW YOUR WORKING] [10 marks] (c) What is the value of the equity after the transaction? [10 marks] [SHOW YOUR WORKING]
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