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Currently, the firm is all equity funded with 1000000 shares valued at $12 per share and the required return on equity i
Posted: Thu May 19, 2022 12:15 am
by answerhappygod
- Currently The Firm Is All Equity Funded With 1000000 Shares Valued At 12 Per Share And The Required Return On Equity I 1 (64.1 KiB) Viewed 25 times
Currently, the firm is all equity funded with 1000000 shares valued at $12 per share and the required return on equity is 9%. Income tax rate is 21%. Your banker has indicated that the following leverage restructurings are possible: Number of shares 750.000 600,000 500,000 Debt Leverage 25.00% 40.00% 50.00% Interest 6.50% 7.00% 7.50% ROE 9.50% 9.75% 10.25% Estimate the share prices for the following debt restructures 25%, 40%, and, 50%, respectively: $14.14: $13.92: $13 $13.92: $14.14: $13 $13: $13.92; $14.14 $14.14: $13: $13.92 $13.92: $13; $14.14