Page 1 of 1
Currently, the firm is all equity funded with 1000000 shares valued at $10 per share and the required return on equity i
Posted: Thu May 19, 2022 12:17 am
by answerhappygod
- Currently The Firm Is All Equity Funded With 1000000 Shares Valued At 10 Per Share And The Required Return On Equity I 1 (53.39 KiB) Viewed 41 times
Currently, the firm is all equity funded with 1000000 shares valued at $10 per share and the required return on equity is 8%. Income tax rate is 30%. Your banker has indicated that the following leverage restructurings are possible: Number of shares 800,000 700,000 500,000 Debt Leverage 20.00% 30.00% 50.00% Interest 6.50% 7.00% 7.50% ROE 8.50% 8.75% 9.25% Estimate the share prices for the following debt restructures 20%, 30%, and, 50%, respectively: $10.66: $11.62: $10.43 $10.43: $10.66: $11.62 $11.62: $10.66: $10.43 olo $11.62: $10.43: $10.66 $10.66: $10.43: $11.62