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​Rally, Inc., is an​ all-equity firm with assets worth $50 billion an 5  billion shares outstanding. Rally...

​Rally, Inc., is an​ all-equity firm with assets worth $50 billion an 5  billion shares outstanding. Rally plans to borrow $18 billion and use funds to repurchase shares.​ Rally's corporate tax rate is 21%​, and Rally plans to keep its outstanding debt equal to $18 billion permanently.

a. Without the increase in​ leverage, what would be​ Rally's share​ price?

Without the increase in​ leverage, Rally's share price is ​$.............(Round to the nearest​ cent.)

b. Suppose Rally offers $10.52 per share to repurchase its shares. Would shareholders sell for this​ price?

▼(yes -no). ​(Select from the​ drop-down menu.)

The minimum share price they would sell for is ​$...............​ (Round to the nearest​ cent.)

c. Suppose Rally offers $10.99 per​ share, and shareholders tender their shares at this price. What will be​ Rally's share price after the​ repurchase?

If Rally offers $10.99 per​ share, and shareholders tender their shares at this​ price, the share price after the repurchase will be ​$.............​(Round to the nearest​ cent.)

d. What is the lowest price Rally can offer and have shareholders tender their​ shares? What will be its stock price after the share repurchase in that​ case?

The lowest offer per share is​$.............(Round to the nearest​ cent.)

The stock price after repurchase is ​$............ (Round to the nearest​ cent.)

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 2 years ago
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