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Question 22 Not yet answered Company Beta operates in a world of perfect capital markets according to Modigliani and Mil
Posted: Sat Feb 19, 2022 2:32 pm
by answerhappygod
- Question 22 Not Yet Answered Company Beta Operates In A World Of Perfect Capital Markets According To Modigliani And Mil 1 (88.55 KiB) Viewed 45 times
Question 22 Not yet answered
Company Beta operates in a world of perfect capital markets according to Modigliani and Miller (MM). The firm has 5 million shares outstanding and the share price is 100.00 EUR. The market value of debt is 400 million. Beta now plans a capital increase against cash contributions. The
company wants to raise 88 million EUR of fresh capital. Assume that Beta considers choosing a subscription price of 88.00 EUR and plans to issue 1 million new shares. Marked out of 3.00 P Flag
question What would be the share price after the capital increase in perfect capital markets? Select one: A. 95.00 EUR B. 100.00 EUR C. 98.00 EUR D. 90.00 EUR